The IRS on July 21, 2025, released Notice 2025-37, announcing the inflation-adjusted credit amounts for calendar year 2025 applicable to tax credits available under Internal Revenue Code Sections 45U, 45V and 45Z, which were added to the Code by the Inflation Reduction Act of 2022.
- Section 45U provides an income tax credit for producing electricity at a qualified nuclear power facility.
- Section 45V provides an income tax credit for producing qualified clean hydrogen.
- Section 45Z provides an income tax credit for producing clean transportation fuel.
The credit amounts available under these sections are annually adjusted for inflation and published via IRA notice. Notice 2025-37 provides the following credit rate updates:
Section 45U – Zero-Emission Nuclear Power Production Credit
- Inflation adjustment factor for sales of electricity occurring
in 2025: 1.0242
- The inflation adjustment factor is a fraction the numerator of which is the gross domestic product (GDP) implicit price deflator for 2024 (125.234) and the denominator of which is the GDP implicit price deflator for 2023 (122.273).
- Applicable credit amount:
- base amount – 0.3 cents
- reduction amount – 2.6 cents
Section 45V – Production of Clean Hydrogen Credit
- Inflation adjustment factor for qualified clean hydrogen
produced in 2025: 1.0611
- The inflation adjustment factor is a fraction the numerator of which is the GDP implicit price deflator for 2024 (125.234) and the denominator of which is the GDP implicit price deflator for 2022 (118.026).
- Credit amounts per kg of hydrogen based on lifecycle emissions:
- not greater than 4 kilograms of carbon dioxide equivalent (CO2e) per kilogram of hydrogen and not less than 2.5 kilograms of CO2e per kilogram of hydrogen: 12.7 cents
- less than 2.5 kilograms of CO2e per kilogram of hydrogen and not less than 1.5 kilograms of CO2e per kilogram of hydrogen: 15.9 cents
- less than 1.5 kilograms of CO2e per kilogram of hydrogen and not less than 0.45 kilograms of CO2e per kilogram of hydrogen: 21.3 cents
- less than 0.45 kilograms of CO2e per kilogram of hydrogen: 63.7 cents
Section 45Z – Clean Fuel Production Credit
- Inflation adjustment factor for transportation fuel sold in
2025: 1.0611
- The inflation adjustment factor is a fraction the numerator of which is the GDP implicit price deflator for 2024 (125.234) and the denominator of which is the GDP implicit price deflator for 2022 (118.026).
- Applicable credit amount:
- non-sustainable aviation fuel (SAF) transportation fuel sold in
2025:
- base amount – 0.21 cents
- alternative amount – $1.06
- SAF transportation fuel sold in 2025:
- base amount – 0.37 cents
- alternative amount – $1.86
- non-sustainable aviation fuel (SAF) transportation fuel sold in
2025:
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
