Sponsors
The bill extends and clarifies the refined‑coal §45 tax credit to provide predictable industry support and simpler timing for compliance, at the cost of continuing federal revenue loss, prolonging a fossil‑fuel subsidy that may slow energy decarbonization, and requiring some administrative updates.
Utilities and refined‑coal producers can claim the §45 refined‑coal production tax credit for production sold after Dec 31, 2025 through purchases made before Jan 1, 2033, providing continued predictable tax incentives that lower operating costs and support industry revenue.
Taxpayers and the IRS get a clear Jan 1, 2033 calendar cutoff that simplifies timing and compliance for claiming the credit, reducing ambiguity in administration.
All taxpayers face reduced federal revenue because the extension continues tax expenditures for refined coal through 2032, increasing budgetary costs.
Rural communities and utilities may experience continued reliance on fossil‑fuel refined coal because the credit supports coal use, which could slow the transition to lower‑carbon energy and worsen climate impacts.
Producers and the IRS must update compliance, reporting, and guidance due to changed timing and cross‑reference edits, creating administrative burdens and short‑term costs.
Based on analysis of 2 sections of legislative text.
Introduced January 14, 2026 by Carol Devine Miller · Last progress January 14, 2026
Changes the refined coal production tax credit so eligible production is defined by a calendar cutoff — production before January 1, 2033 — instead of being limited to a 10-year window tied to when a facility was placed in service. The change applies to refined coal produced and sold after December 31, 2025 and includes conforming edits to related tax-code cross-references. This amendment shifts the timing rule for who can claim the credit, affecting refined coal producers, purchasers of refined coal (like utilities), and federal tax receipts; it will require IRS guidance to implement and could extend credit eligibility for some existing producers through the end of 2032.