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Tax credit transferability: start here

Since 2023, a U.S. business that earns certain clean-energy tax credits can sell them for cash to an unrelated company. This page explains the idea in five minutes.

Verified 11 Oct 2026 · page reviewed 11 Oct 2026

The idea

A tax credit reduces the tax a business owes. Many businesses that build clean-energy projects or factories earn more credits than they can use. Section 6418 of the Internal Revenue Code lets them sell those credits to another company for cash. The buyer uses the credits against its own tax; the seller gets cash now^[1].

The buyer pays less than face value, typically somewhere between 80 and 96 cents for each dollar of credit in 2026, depending on the credit, the deal size and the seller’s strength^[2]. The market is large: about $42 billion of credits changed hands in 2025^[3].

Who can sell

Any taxpayer that earns an eligible credit, except the tax-exempt and government bodies that use elective pay instead^[1]. In practice: project developers, independent power producers, manufacturers, fuel producers and the partnerships and S corporations that own projects. A partnership or S corporation sells at the entity level^[1].

Who can buy

Any taxpayer that is not related to the seller^[1]. Buyers are mostly corporations with large federal income tax bills. The passive activity rules apply to purchased credits, which in practice limits individual and closely held buyers^[4]. Credits under §§45Q, 45U, 45X, 45Y, 45Z and 48E cannot be sold to a specified foreign entity^[1].

Which credits

Eleven clean-energy credits can be sold, plus the small agri-biodiesel producer credit added in 2025^[1]:

• Electricity: §45, §45Y, §48, §48E, §45U
• Manufacturing: §45X, §48C
• Fuels and molecules: §45Z, §45V, §45Q
• Charging: §30C

What changed in 2025

The 2025 budget law (Public Law 119-21) kept transferability but changed the underlying credits^[1]:

• wind and solar projects that started construction after 4 July 2026 must be in service by the end of 2027^[5];
• new rules bar credits for projects with too much “material assistance” from prohibited foreign entities^[6];
• several credits end sooner (§30C ended on 30 June 2026^[7]; §45V needs construction to begin before 2028^[8]), and §45Z was extended to 2029^[9].

The deadlines page lists every date.

Where to go next

• Selling? Run the Readiness Checker, then read how a transfer works and pre-filing registration.
• Buying? Start with buyer diligence and risk.
• Just pricing? Use the Credit Value Estimator and the prices page.
• Your situation? The guides cover small solar projects, partnerships and S corporations, manufacturers, whether to sell at all, and home solar.