Sponsors (7)
The bill offers a targeted, time-limited tax incentive to accelerate adoption of in-ovo sexing technology and reduce male chick hatching, but strict eligibility, accuracy, and tax recapture rules plus nonrefundable/time-limited treatment mean many smaller or loss-making hatcheries and some technologies may not fully benefit.
Commercial egg hatcheries and small poultry businesses can claim a substantial tax credit (50% in 2026, 40% in 2027, 30% in 2028) for purchasing and installing qualifying in-ovo sexing equipment, reducing upfront capital costs.
Farmers and hatcheries are financially encouraged to adopt in-ovo sex identification technology, which can reduce the hatching and rearing of unwanted male chicks and improve animal-welfare and environmental outcomes.
Businesses can use the credit as part of the established general business credit mechanism, allowing them to offset tax liability in the year equipment is placed in service and improving near-term cash flow and administrative familiarity.
Smaller or loss-making hatcheries may not realize the full benefit because the credit is nonrefundable and time-limited (available only for property placed in service through 2028).
The 95% accuracy requirement and additional Treasury-prescribed eligibility rules may exclude some technologies and impose compliance costs, limiting which in-ovo sexing solutions qualify and raising adoption barriers.
Taxpayers face recapture rules and a required reduction in property basis equal to the credit, which can increase future taxable gains and complicate depreciation and long-term tax planning for equipment purchases.
Based on analysis of 2 sections of legislative text.
Creates a temporary nonrefundable business tax credit for qualified in-ovo sex identification equipment at U.S. commercial egg hatcheries, with rates of 50% (2026), 40% (2027), and 30% (2028).
Introduced October 17, 2025 by Nicole Malliotakis · Last progress October 17, 2025
Creates a temporary business tax credit to help commercial egg hatcheries buy in-ovo sex identification equipment. The credit covers a portion of qualified equipment expenditures (purchase, installation, necessary facility modifications) for devices that identify avian embryo sex with at least 95% accuracy and that are placed in service in the United States between 2026 and 2028. Credit rates are 50% for 2026, 40% for 2027, and 30% for 2028, the credit is nonrefundable, and special basis-reduction and recapture rules apply.