KPMG report: First guidance on the material assistance cost ratio under sections 45Y, 48E, and 45X
Analysis and observations on Notice 2026-15
The IRS on February 12, 2026, released Notice 2026-15, providing the first substantive guidance on how taxpayers should calculate the material assistance cost ratio (MACR). The notice outlines two separate frameworks for computing the MACR—one for the tech-neutral clean electricity credits under sections 45Y and 48E, and another for the advanced manufacturing production credit under section 45X.
These frameworks respond to new restrictions introduced by Pub. L. No. 119-121 (commonly referred to as the “One Big, Beautiful Bill Act”), which amended sections 45Y, 48E, and 45X to deny clean energy tax credits for qualified facilities, energy storage technologies (ESTs), and eligible components that include “material assistance from a prohibited foreign entity” (PFE). Whether material assistance from a PFE exists is determined by computing a MACR and comparing it to statutory applicable threshold percentages. In plain terms, the MACR measures how much of a project’s cost came from non-PFE sources. If that ratio is less than the applicable statutory threshold, the taxpayer's credit is denied in most cases.
Read a February 2026 report prepared by KPMG LLP that provides analysis and observations on Notice 2026-15.