Issue Number: 2026-04
Inside This Issue
IRS provides interim guidance on special depreciation allowance for qualified production property
Treasury and IRS provided interim guidance on special depreciation allowance for qualified production property under the One, Big, Beautiful Bill. Taxpayers may rely on the guidance provided in Notice 2026-16 until proposed regulations are issued.
This guidance includes:
- Definitions of qualified production property and qualified production activity
- How to determine the special depreciation allowance
- How and when an election to treat property as qualified production property
- How the depreciation recapture rules apply to property
The IRS is seeking public comment on these proposed regulations by April 20, 2026. Businesses are encouraged to view Notice 2026-16 to submit a comment.
For more details see the news release.
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IRS requests comments on new regulations for certain energy tax credits
Treasury and the IRS are providing guidance for determining whether electricity-producing qualified facilities, energy storage technologies, or eligible components are receiving material assistance from a prohibited foreign entity and would be ineligible for certain energy tax credits.
One, Big, Beautiful Bill added new restrictions to clean electricity credits and the advanced manufacturing production credit to determine eligibility for credits when there is material assistance from a PFE.
As explained, in Notice 2026-15 Treasury and IRS will propose regulations about the definition of a PFE and the calculation of the material assistance cost ratio that taxpayers must use to determine whether there was material assistance from a PFE.
The IRS is seeking public comment on these proposed regulations by March 30, 2026. Businesses are encouraged to review the notice to submit a comment.
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IRS issues tax relief for Louisiana and Montana
Below is information about some recent disaster related tax relief granted by the IRS.
- Businesses and individuals in Louisiana affected by severe winter ice storms that began on Jan. 22, 2026, now have until March 31, 2026, to file various federal business and individual tax returns and make tax payments.
- Businesses and individuals in Montana affected by severe storms and flooding that began on Dec. 10, 2025, now have until May 1, 2026, to file various federal business and individual tax returns and make tax payments.
The IRS automatically identifies taxpayers located in covered disaster areas and applies filing and payment relief. But affected taxpayers who reside or have a business located outside the covered disaster area should call the IRS Special Services toll-free number at 866-562-5227 to request this tax relief.
The Tax relief in disaster situations page on IRS.gov has the most recent tax relief info for taxpayers affected by a disaster.
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Other tax news
The following information may be of interest to individuals and groups in or related to small businesses:
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