45V hydrogen tax credit after the 2025 cutback: start construction by the end of 2027

Eligibility in the order a project meets it

There is no application round and no award; a producer earns §45V on its tax return if it meets the following conditions.³

1. Construction begins before 1 January 2028. The 2025 budget law moved this deadline from 2033 to 2028.^1,2 IRS accepts either significant physical work or paying or incurring at least 5% of total facility cost, with continuity rules.³ A House bill introduced in April 2026 (H.R. 8477) would reverse the 2025 changes. The GovInfo bill versions and linked history checked on 8 October 2026 show introduction and committee referral on 23 April, followed by cosponsor additions through 8 June, with no passage or enactment entry in those records. Congress.gov was inaccessible and the history did not show a freshness date, so this is a finding within the checked records, not a complete current-status determination. The IRS Form 7210 instructions checked separately on 8 October still state the post-2027 construction restriction.⁶
2. The taxpayer owns the facility and produces hydrogen in the United States in its trade or business, for sale or use, and an unrelated party verifies the production and the sale or use.^2,5
3. Each production process has a lifecycle intensity of at most 4.0 kg CO₂e/kg H₂, measured well-to-gate with the DOE 45VH2-GREET model or a provisional emissions rate (PER). Processes are rated separately, not blended into one facility figure.^2,5
4. Electrolytic projects that want a low score from clean power must retire matching energy attribute certificates that meet the incrementality, time-matching and deliverability rules. See electricity rules.⁵
5. The credit runs for ten years from the date the facility is placed in service, on the kilograms produced in each year.²

What the credit is worth in 2026

The credit equals kilograms of qualified hydrogen times an amount that depends on the process's emissions tier. The base amount is multiplied by five if the prevailing-wage and registered-apprenticeship requirements are met.^2,4

The rate follows the year the hydrogen is produced, not the year the project was built. The IRS applied an inflation factor of 1.0929 for 2026 and rounds to the nearest tenth of a cent.⁴ Facilities whose construction began before 29 January 2023 get the ×5 amount without construction-phase wage rules, provided later alteration and repair work meets them.² Two factors also affect the net credit: PWA applies to construction and to covered repairs throughout the credit period, with apprenticeship labour-hour shares of 10–15% depending on construction start; and tax-exempt bond financing can cut the credit by up to 15%.^3,2

Estimate a facility's credit

Worked example: 1,000,000 kg produced in 2026 at 0.40 kg CO₂e/kg gives 1,000,000 × $0.656 = $656,000 at the base rate, or $3,280,000 with PWA.⁴ The volume and intensity are illustrative; the per-kg rates are the IRS figures.

Near a tier boundary, a small change in emissions intensity can change the credit rate. At exactly 0.45 the 33.4% tier applies, so a process modelled at 0.44 and one at 0.45 differ by roughly a factor of three in credit.^2,4 Check which 45VH2-GREET version and which inputs your verifier will accept before relying on a top-tier score.

Electricity rules for electrolytic hydrogen

An electrolyser on the grid is scored at the regional grid-average emissions rate unless it retires energy attribute certificates (EACs) that meet three tests. One EAC covers one MWh used, and it must be retired in a qualified registry and not claimed for anything else.⁵

DOE's model is Rev. December 2025, which added four pathways and set a default natural-gas methane leakage rate of 0.7%.^8,9 Facilities that began construction before 26 December 2023 may irrevocably elect the December 2023 model version for the rest of their credit period.⁵ A pathway the model does not cover needs a DOE emissions value, which DOE currently bases on an AACE Class 3 FEED study, before the IRS petition for a PER; DOE's page shows no deadline for requests.^10,5

Four dates that are easy to confuse

A calendar-year taxable company starts construction on 31 December 2027 and places the plant in service on 1 January 2029. It meets the construction deadline and earns credits through 2038, but can elect direct pay only for 2029–2032; later years must be used against its own tax or transferred.^1,11,12 Tax-exempt and government entities follow a different direct-pay rule.¹¹

Stacking with 45Q, 48 and 45Y/48E

Claiming and monetising the credit

• File Form 7210 for each facility with the return for the production year, attaching the unrelated-party verification report, and Form 7220 when claiming the ×5 amount; PER claims also attach the DOE emissions-value documentation.^3,5
• Direct pay (§6417) and transfer to an unrelated buyer for cash (§6418) both remain available for §45V after OBBBA, each with pre-filing registration. The same credit cannot use both.^11,12,3

What you still need to check

• Evidence that physical work or the 5% safe harbour was met before 1 January 2028, and continuity after that.
• Your process intensity in the current 45VH2-GREET version, with the inputs your verifier will sign off, and margin to the next tier boundary.
• For grid power: an EAC plan that still works under hourly matching from 2030, in your balancing-authority region.
• Prevailing-wage and apprenticeship records for construction and for repairs over all ten years.
• Any historical §45Q claims on capture equipment inside the facility boundary, and whether a §48(a)(15) election was made.
• Tax-exempt bond financing, and how the direct-pay or transfer route fits your tax status and years.