How much time do I have left to claim the clean energy tax credits through the Elective Pay process for my project?

While the Elective Pay process itself remains intact, H.R. 1 sunsets many of the clean energy tax credits that were claimed using the Elective Pay process and adds burdensome Prohibited Foreign Entity (PFE) restrictions. Timelines for when credits expire and PFE restrictions begin are listed in the chart below.

*To comply with “effective control” payment rules, entities must also examine their payments from their previous tax years. For example, an entity claiming clean energy tax credits through Elective Pay for their 2026 tax year would need to review payments made in their 2025 and earlier tax years for compliance.  

**A FAQ sheet released by the IRS on August 21, 2025, explained that for the phase-out of the 45W, “a vehicle is ‘acquired' as of the date a written binding contract is entered into and a payment has been made. A payment includes a nominal down payment or a vehicle trade-in.”

Sources: S2 Strategies, Lilette Advisors, L4GG, and NYU Tax Law Center.

Watch a video overview of H.R.1’s major changes to the Inflation Reduction Act’s (IRA) clean energy tax credits here from 5:47-9:58

Learn more from L4GG Guidance Brief Updates to Certain Elective Pay Eligible Credits under HR1