Details of Public Law 119-21, section 70512 , One Big Beautiful Bill Act

IRC section 45

This provision expands the 10 percent increase in the renewable electricity production credit to advanced nuclear facilities located in a metropolitan statistical area which has (or, at any time during the period beginning after December 31, 2009, had) 0.17 percent or greater direct employment related to the advancement of nuclear power.

IRC section 45Y

The provision terminates the clean electricity production credit for qualified wind and solar facilities placed in service after December 31, 2027. Additionally, a qualified facility that begins construction after December 31, 2025, that receives material assistance from prohibited foreign entities is ineligible for the tax credit. No credit is allowed to a specified foreign entity or foreign-influenced entity. The provision also prohibits the clean electricity production credit for the production of electricity with respect to qualified solar water heating property or qualified small wind energy property, as defined in IRC section 25D(d)(1) and (4), respectively, that are leased to a third party during the taxable year. The provision modifies the credit phase out.

IRC section 6418

A taxpayer is prohibited from transferring eligible energy credits as a payment against income tax to a specified foreign entity as defined.

IRC section 6501

The provision extends the statute of limitations to assess a deficiency for an underpayment of tax as a result of an error in the determination of whether a taxpayer received “material assistance from a prohibited foreign entity,” to 6 years after the return for that year was filed.

IRC section 6662

The provision modifies the definition of what is a substantial understatement for the accuracy-related penalty from 10 percent of the tax required on the return to 1 percent when the understatement is based on the disallowance of the following applicable energy credits: advanced manufacturing production credit, clean electricity production credit, and clean electricity investment credit.

IRC section 6695B

This provision adds section 6695B, which imposes a new penalty for providing an inaccurate or false certification with respect to a manufactured product, eligible component, or constituent element, material, or subcomponent of an eligible component related to the construction of a qualified facility or energy storage technology that results in the disallowance of the advanced manufacturing production credit, clean electricity production credit, or clean electricity investment credit that exceeds the lesser of 5 percent of the tax required to be reported on the return or $100,000.

IRC section 7701

This provision adds definitions of the terms “prohibited foreign entities” as a “foreign-influenced entity,” or a “specified foreign entity,” which includes a “foreign-controlled entity” and material assistance from a prohibited foreign entity.

IRC section 45

California does not conform to IRC section 45 and does not conform to the changes made by OBBBA to IRC section 45.

IRC section 45Y

California does not conform to the clean electricity production credit. As a result, California does not conform to the changes made to the credit by this provision.

IRC section 6418

California generally does not conform to IRC section 6418, but does conform to IRC section 6418’s treatment of partnerships and S corporations. California excludes from gross income payments made pursuant to IRC 6417 and 6418 under California standalone provisions. California does not conform to the changes made to IRC 6418, by this provision.

IRC section 6501

California does not conform to IRC section 6501 and does not conform to the changes made to that section by this provision.

IRC section 6662

Under the Administration of Franchise and Income Tax Law, California has modified conformity to IRC 6662, as it existed as of the specified date of January 1, 2025. California does not conform to the changes related to the accuracy-related penalty, made by this provision.

IRC section 6695B

California does not conform to IRC section 6695B, added by this provision.

IRC section 7701

California does not conform to the IRC section 7701(a)(51) or (52), added by this provision.