IRS Notice 2026-15 provides guidance on credit eligibility for certain cross-border supply chains

The Internal Revenue Service (IRS) has released Notice 2026-15 (Notice), which provides guidance on the Material Assistance Cost Ratio (MACR) rules enacted under the One Big Beautiful Bill Act.

The Notice, published on February 12, 2026, establishes the interim framework for maintaining credit eligibility for clean energy industry participants with cross-border supply chains and applies to energy tax credits under Sections 45X, 45Y, and 48E.

While the Notice does not provide guidance on determining prohibited foreign entity (PFE) status, it previews a small aspect of upcoming proposed regulations for PFE determinations.

This alert provides background on the MACR rules and key provisions of the Notice’s guidance.

MACR calculations

The MACR rules generally restrict taxpayers from claiming credits if 1) their facilities include a threshold percentage of manufactured products (MPs) and components (MPCs) produced by a PFE or 2) their eligible components incorporate a threshold percentage of constituent elements, materials, or subcomponents (collectively, Constituent Materials) produced by a PFE.

Notice provides and clarifies the use of safe harbors, which generally are expected to ease administrative burdens related to supply-chain tracing:

• Identification safe harbor: Taxpayers may rely on IRS tables to identify specific items (MPs, MPCs, and Constituent Materials) that must be tracked. Items omitted from these tables are excluded from the MACR calculation, significantly simplifying diligence. With respect to Section 45X, for eligible components listed as Applicable Project Components in the domestic content safe harbor tables, the relevant Constituent Materials are those that are listed as MPCs within the tables.


• Certification safe harbor: Taxpayers may rely on written supplier certifications confirming their non-PFE status. However, this reliance is only valid if the taxpayer does not know (or does not have reason to know) that the certification is false.


• Cost percentage safe harbor: Taxpayers may use Assigned Cost Percentages from IRS tables (initially relying on Notice 2025-08) for sourced property rather than determining the actual cost. The guidance confirms that the line item for Production can be used if the MP manufacturer is not a PFE and does not require that all MPCs be non-PFE sourced (which is a deviation from the domestic content rules).

In addition, the Notice addresses numerous compliance questions regarding the application of the MACR rules. Key highlights include:

• Confirming that the domestic content framework largely applies when determining the MACR for Sections 45Y and 48E (i.e., assessing MP and MPC manufacturers and confirming that subcomponents and steel/iron products are not relevant for MACR)


• Clarifying that, unlike in the domestic content framework, the PFE status of an MP and an MPC is determined independently; consequently, a PFE-sourced MPC does not automatically affect the status of the incorporating MP, nor does a PFE-sourced MP dictate the status of its individual MPCs


• Confirming that the MACR for Section 45X looks to the sourcing of the Constituent Materials that are incorporated into the eligible component or consumed in the production of the eligible component


• Providing that “[d]irect costs, including direct labor costs, of incorporating MPs into the qualified facility or EST are not included as part of direct costs attributable to an MP” for purposes of Sections 48E and 45Y


• Providing that the PFE status of suppliers is relevant for the year that the cost was paid or incurred by the taxpayer (generally, upon receipt of the property for accrual method taxpayers) and not the year of its production


• Confirming that the begun-construction guidance under Notice 2025-42 does not apply for purposes of determining applicability of MACR to a qualified facility or energy storage technology


• Providing for averaging of costs for “specified periods” in determining the MACR for Section 45X and certain energy storage technologies for purposes of Section 48E


• Providing a de minimis tracking rule that allows for an assignment of MPCs whose costs are less than ten percent of a qualified facility or energy storage technology to such property for purposes of Sections 45Y and 48E


• Confirming that the status of resellers is not relevant to the character of the MP and MPC, and that the relevant status is that of the entity that mines, manufactures, or produces MPs, MPCs, and Constituent Materials


• Treating qualified interconnection property as a separate unit, with the result that, if interconnection property fails the MACR, it invalidates credits with respect to that specific property but does not affect the credit eligibility of a qualified facility

The Notice further describes the United States Department of the Treasury (Treasury)’s intent to issue proposed regulations for anti-circumvention, including “through transfers or alterations of rights, property, or both, including transfers or alterations resulting in lapses of restricted foreign ownership or control that are temporary in nature.” Moreover, the Treasury intends to publish proposed regulations providing that meeting any one of the effective control factors creates effective control (e.g., a relevant license being entered into or modified after July 4, 2025).

Conclusion

The Notice requests comments regarding certain aspects of the MACR calculations and general application of the MACR rules by March 30, 2026.
In addition, the Notice provides that taxpayers may rely on the following rules:

• General rules (Sections 3 and 5.1 of the Notice) apply for projects that begin construction under Sections 45Y/48E and sales under Section 45X prior to 60 days after the publication of forthcoming proposed regulations


• Safe harbors (Section 4 of the Notice) apply for projects that begin construction under Sections 45Y/48E and sales under Section 45X prior to 60 days after the publication of forthcoming safe harbor tables and other guidance

Buyers of 2026 energy tax credits under Sections 45Y and 48E will be largely unimpacted by the Notice or the MACR rules more broadly. However, buyers of 2026 Section 45X credits are encouraged to consider the Notice during their due diligence processes.

Developers, manufacturers, and investors are encouraged to carefully review their supply chains and existing arrangements in light of this Notice, particularly with respect to MACR calculations.

For more information, please contact the authors.