Tax Bytes: Week of August 18, 2025

Tax developments

New beginning of construction guidance related to the termination of wind and solar renewable energy tax credits under the OBBBA

On August 15, 2025, the Treasury Department and Internal Revenue Service issued much-anticipated guidance (Notice 2025-42) regarding the determination of when an applicable wind or solar facility is considered to begin construction for purposes of the provisions of the One Big Beautiful Bill Act (OBBBA) that terminate clean energy tax credits for applicable wind and solar facilities.

Under the OBBBA, to qualify for production tax credits under IRC Section 45Y or investment tax credits under Section 48E, an applicable wind or facility generally must be placed in service on or before December 31, 2027. An applicable facility is not subject to this placement in service deadline, however, if the facility is considered to have achieved beginning of construction (BOC) on or before July 4, 2026. For purposes of the BOC Deadline, the Notice generally eliminates the Five Percent Safe Harbor method that has been allowed under prior guidance to establish BOC – leaving the facts-and-circumstances-based Physical Work Test as the sole means of establishing BOC for this purpose. Further, the Notice retains the four-year continuity safe harbor for purposes of the continuous construction requirement. 

Read our full alert here.

White House issues executive order: “Democratizing Access for Alternative Assets for 401(k) Investors”

On August 7, 2025, the White House issued an executive order called “Democratizing Access to Alternative Assets for 401(k) Investors” (Order). The Order focuses on 401(k) plans and other participant-directed defined contribution retirement plans subject to the fiduciary provisions of the Employee Retirement Income Security Act of 1974, as amended (ERISA). The White House directed the Department of Labor (DOL) to facilitate the direct and indirect investment by plans and plan participants in “alternative assets” (Alternative Assets). To that end, the Order states that the DOL should coordinate its rulemaking with other regulators, including the Securities and Exchange Commission (SEC) and the Department of the Treasury. The DOL must act within 180 days from the date of the Order. The Order also directs the SEC to look at some of its rules and guidance that may inhibit ERISA-covered plans and participants from investing in Alternative Assets.

Read our full alert here. 

Recent Eversheds Sutherland Tax insights 

OB3 Webinar Series: Breaking down the One Big Beautiful Bill and its key tax provisions