By Joseph Buckland, Senior Tax Manager, Sherbert CPA, PC
joseph.buckland@sherbertcpa.com
On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (OBBB) into law that provides significant tax reform for years 2025 and beyond. This legislation finalizes, extends and makes permanent multiple tax cuts and changes. Also Included in these provisions of the OBBB are several items of note that are terminated as part of the legislation. Highlights of these terminated provisions include:
Business Provisions Terminating as a result of provisions within the One Big Beautiful Bill:
Internal Revenue Code Section (IRC) 179D – Energy Efficient Commercial Building Deduction:
Allows a deduction equal to the cost of Energy Efficient Commercial Building property placed in service during the taxable year. The OBBB amends IRC Section 179D by adding a termination section which applies to property beginning construction after June 30, 2026. This termination allows for a small window for taxpayers to take advantage of the allowed deduction under this code section.
Internal Revenue Code Section 45V – Credit for Production of Clean Hydrogen:
Allows a tax credit for the production of clean hydrogen at a qualified clean hydrogen production facility for any taxable year during the 10-year period beginning on the date the facility was originally placed in service. This tax credit was originally set to terminate with respect to property whose construction begins after December 31, 2032. Under the OBBB the date for termination date is accelerated and now applies to property whose construction begins after December 31, 2027.
Internal Revenue Code Section 45W – Credit for Qualified Commercial Clean Vehicles:
Allows for a tax credit with respect to each qualified commercial clean vehicle placed in service by the taxpayer during the taxable year. This tax credit was originally set to terminate with respect to vehicles acquired after December 31, 2032. Under the OBBB this date is accelerated and now applies to vehicles acquired after September 30, 2025.
Cost Recovery for Qualified Clean Energy Property:
Solar and wind energy property has been included in the classification of 5-year property for MACRS depreciation under IRC Section 168(e)(3)(B)(vi)(I) and therefore eligible for bonus depreciation under IRC Section 168(k). As part of the OBBB the subsection of IRC Section 168(e) that classifies solar and wind energy property as 5-year property has been removed. The removal from inclusion as 5-year property for solar and wind energy property is effective for property where the construction begins after December 31, 2024.
Individual Provisions Terminating as a result of provisions within the One Big Beautiful Bill:
Internal Revenue Code Section 25C – Energy Efficient Home Improvement Credit:
IRC Section 25C allows an individual a tax credit based on the total amounts paid or incurred on qualified energy efficiency improvements, residential energy property expenditures and home energy audits for qualified property placed in service during the taxable year. This tax credit was originally set to terminate with respect to property placed in service after December 31, 2032. Under the OBBB this date is accelerated and now applies to property placed in service after December 31, 2025.
Internal Revenue Code Section 45L – New Energy Efficient Home Credit:
IRC Section 45L allows an eligible contractor to claim a tax credit for each qualified new energy efficient home which is constructed by the eligible contractor and is acquired by an individual from that contractor for use as a residence during the taxable year. This tax credit was originally set to terminate with respect to qualified new energy efficient homes acquired after December 31, 2032. Under the OBBB this date is accelerated and now applies to qualified new energy efficient homes acquired after June 30, 2026.
These are just some of the highlights of business tax provisions and individual tax provisions that were terminated as a part of the One Big Beautiful Bill tax reform. Many of these terminating provisions retain a small window to take advantage of the benefits. To discuss this, or any other upcoming tax law changes, contact the Sherbert Group.