Can corporations claim the investment tax credit?

Yes. C corporations are the main users of the clean energy Investment Tax Credit (ITC). A corporation can earn it by owning a qualifying project, invest in a project through tax equity, or buy transferable credits for cash. In 2026 the Section 48E ITC is 30% of eligible cost with prevailing wage, before bonus adders.

Corporations have the steady federal tax bills that credits need. An ITC is a dollar-for-dollar reduction in income tax, so a company that owes $20 million and uses $5 million of credits pays $15 million. Since 2023, corporations can also buy transferable tax credits they didn't earn, which has made clean energy credits a normal part of corporate tax planning.

New projects mostly claim the technology-neutral Section 48E credit, while projects that started construction before 2025 can still use legacy Section 48. Both are claimed on Form 3468 and carried to Form 3800. Our investment tax credit guide covers rates and eligible property.

How do C corporations use the ITC?

Corporations use the ITC three ways. They own projects and claim the credit directly, they invest as tax equity partners and receive most of a project's credits, or they buy transferable credits from developers under Section 6418, usually for about 91 cents per dollar of credit in 2026.

• Own the project. A manufacturer that installs solar and storage at its plants claims the credit itself and keeps the depreciation, but must reduce basis by half the credit. See our solar panel depreciation guide for the math.

• Tax equity. Banks and large corporations invest in a project partnership, take most of the credits and depreciation, and get a cash return over time. Our tax equity guide explains the structures.

• Buy transferable credits. The buyer pays cash for credits at a discount and owns no project. Crux reported 2026 average prices of $0.913 for ITCs and $0.930 for production tax credits, so a $10 million ITC purchase costs about $9.13 million.

The rules require cash. Treasury Regulation 1.6418-2 says no transfer election is allowed if the seller "receives any consideration other than cash." Our tax equity vs. transferability comparison covers when each route fits.

How much tax can a corporation offset with the ITC?

A corporation can use general business credits, including the ITC, against its net income tax minus 25% of the net income tax above $25,000. A company with $10 million of net income tax can offset up to $7,506,250. Net income tax includes regular tax and tax under Section 55.

The rule is in Section 38(c)(6)(E). For corporations it replaces the general "greater of tentative minimum tax or 25%" test with a single 25% test. Net income tax means "the sum of the regular tax liability and the tax imposed by section 55," minus certain nonbusiness credits. Section 55 is also where the 15% corporate alternative minimum tax sits, so large companies subject to it can generally use credits against that tax too. Confirm the interaction with your tax provider.

So a corporation can't wipe out its whole federal tax bill with credits. Buyers usually size purchases to the limit, then add a cushion for estimated-tax swings. Use the calculator below to test your own numbers.

What happens to unused corporate tax credits?

Unused general business credits carry back one year and forward 20 years under Section 39. Clean energy credits on the Section 6417(b) elective pay list, which include 48E and 45Y, get a longer window: back three years and forward 22, though not to tax years before 2023.

Section 39(a)(4) gives these clean energy credits their own 3-year carryback, applied separately from other business credits. Carrybacks matter for corporations whose income swings. If a company buys or earns more credit than it can use this year, it may recover the excess from tax paid in an earlier year. Our general business credit guide explains the ordering rules, and the Form 3800 instructions show where carryovers go.

Which corporations buy tax credits?

Large corporations with predictable U.S. tax bills buy the most credits. Crux found 98 Fortune 1000 companies, about 11% of potential buyers, bought clean energy credits in the first half of 2026. Financial companies led at 30% participation, followed by consumer staples at 16%.

The data comes from Crux's Q2 2026 benchmarking of Fortune 1000 participation. Nearly 200 F1000 companies took part in all of 2025, and 2026 is on pace to match or beat that. Large-cap companies participated at 13.8%, mid-caps at 9.2% and small-caps at 4.2%. Forty-eight companies bought in both the first and second quarters, which shows buying credits is becoming a recurring treasury program. The second quarter of 2026 set a quarterly record of $14.9 billion in transactions.

Buyers are also choosing lower-risk deals. Investment-grade sellers made up 60% of current-year sales in the first half of 2026, and credits exempt from prohibited foreign entity rules made up another 25%. For market detail, see our tax credit transfer market statistics.

What rules apply to closely held C corporations?

Closely held C corporations and personal service corporations are subject to the passive activity rules in Section 469. A closely held company can use passive credits against tax on its net active income, but not against portfolio income. Widely held public companies aren't limited this way.

A closely held C corporation is one where five or fewer people own more than half the stock. Section 469(a)(2) lists it alongside individuals, estates and trusts, and personal service corporations. Under Section 469(e)(2), a closely held corporation that isn't a personal service corporation can apply passive credits against tax on its net active income. That makes buying credits workable for many family-owned businesses. Our guide to buying tax credits to reduce taxes covers the passive rules in more depth.

Can the ITC offset the base erosion minimum tax?

Partly. Under Section 59A, companies with at least $500 million of average gross receipts can use 80% of certain credits, including the Section 48 energy credit, against the base erosion and anti-abuse tax (BEAT). The statute's list doesn't name 48E or 45Y, so check the treatment with your advisor.

Section 59A(b)(3) defines "applicable section 38 credits" as the low-income housing credit, the Section 45 production credit, and the investment credit "to the extent properly allocable to the energy credit determined under section 48." The 2025 law raised the BEAT rate from 10% to 10.5% for tax years beginning after 2025. Companies subject to BEAT should model credit purchases with this rule in mind.

What risks should corporate credit buyers manage?

The main buyer risks are disallowance, recapture and foreign entity rules. If a purchased credit turns out to be overstated, the buyer repays the excess plus a 20% penalty unless it shows reasonable cause. Buyers manage this with diligence, seller indemnities and tax credit insurance.

Every corporate ITC buyer should understand the penalty. It comes from Treasury Regulation 1.6418-5, which adds "20 percent of such excessive credit transfer" to the buyer's tax. ITCs also carry a five-year recapture period, and credits from projects with prohibited foreign entity exposure sell at a discount of about 1.5 cents. Our tax credit purchase checklist, tax credit insurance guide and FEOC rules guide show how buyers protect themselves.

Sources

• 26 U.S.C. 38 (general business credit limit), 39 (carrybacks and carryforwards), 469 (passive activity rules) and 59A (BEAT)

• 26 CFR 1.6418-2 and 1.6418-5, transfer of eligible credits

• Crux, Benchmarking F1000 participation in the transferable tax credit market (October 13, 2026)

• Crux, Takeaways from clean energy finance in H1 2026 (August 18, 2026)