What: On February 4, 2026, the Internal Revenue Service (IRS) published proposed regulations to amend the Clean Fuel Production Credit created under the Inflation Reduction Act of 2022 to incentivize the production of low-emission transportation fuels (Section 45Z). The Section 45Z proposed amendments would determine clean fuel production credits, including credit eligibility rules, emissions rates, and certification and registration requirements. The proposed regulations define terms, incorporate and clarify rules for domestic corporations, pass-through entities, and other taxpayers intending to claim the Section 45Z credit.
Why: The IRS expects to receive more information on the impact on small businesses through comments on these proposed regulations. Specifically, the IRS invites public comment on whether there are less burdensome alternatives to apply for the Section 45z credit that do not increase the risk of duplication, fraud, or improper payments under Section 45Z.
Action: Review the proposed rule and submit comments to the IRS on or before the April 6, 2026, deadline.
The IRS will also hold a public hearing on May 28, 2026, at 10 AM ET. Requests to participate in the public hearing must be submitted as described in the Comments and Requests for a Public Hearing section.
PROPOSED RULE:
Section 45Z Clean Fuel Production Credit
SUBMIT COMMENTS:
Section 45Z Clean Fuel Production Credit
CONTACT: John Vatian
EMAIL: john.vatian@sba.gov
TOPIC(S):
TAG(S): IRS
Is your small business or entity being impacted by a proposed rule? If yes, write a comment letter to the proposing agency.