What is the 45U tax credit?

The 45U tax credit, formally the zero-emission nuclear power production credit, pays existing U.S. nuclear plants up to 1.5 cents per kWh of electricity sold, when they meet prevailing wage rules. It works like a price floor: the credit shrinks as a plant's revenue per kWh rises and disappears above about 4.5 cents.

Congress created Section 45U in the Inflation Reduction Act of 2022 to keep older reactors from closing when power prices are low. Unlike most clean energy credits, it doesn't reward building something new. It rewards keeping existing zero-carbon output running.

That output is large. As of March 2026, the U.S. had 94 operating commercial reactors at 54 power plants in 28 states, according to the U.S. Energy Information Administration, and nuclear has supplied about 20% of U.S. electricity since 1990. Every one of those reactors was placed in service before August 16, 2022, so the whole fleet falls under 45U rather than the newer Section 45Y credit. For how production credits work in general, see our production tax credit guide.

How much is the 45U nuclear production tax credit in 2026?

In 2026 the 45U credit is 0.3 cents per kWh, or 1.5 cents per kWh for plants that pay prevailing wages on repair work. The full amount applies only when gross receipts are 2.6 cents per kWh or less. IRS Notice 2026-41 set those figures using a 1.0539 inflation factor.

The statute starts with 0.3 cents per kWh and a 2.5 cent revenue threshold, then adjusts both for inflation each year. The base rounds to the nearest 0.05 cent and the threshold to the nearest 0.1 cent, so the base has stayed at 0.3 cents while the threshold moved up. Here's how the numbers have changed:

• 2024: 0.3 cents base, 2.5 cent threshold. The credit hits zero at 4.375 cents per kWh.

• 2025: 0.3 cents base, 2.6 cent threshold (factor 1.0242, Notice 2025-37). Zero at 4.475 cents.

• 2026: 0.3 cents base, 2.6 cent threshold (factor 1.0539, Notice 2026-41). Zero at 4.475 cents.

The five-times multiplier under Section 45U(d) requires paying prevailing wages to laborers and mechanics doing alteration or repair work at the plant. Our prevailing wage guide covers the recordkeeping. The IRS also issued a correction notice telling filers who used the 2024 threshold of 2.5 cents for 2025 sales to amend with 2.6 cents.

How does the 45U reduction amount work?

The credit is cut by 16% of a plant's gross receipts above the threshold, or 80% with the prevailing wage multiplier. In 2026, every cent a plant earns above 2.6 cents per kWh removes 0.8 cents of credit, so a plant earning 4.475 cents or more gets nothing.

Take a plant earning 3.8 cents per kWh in 2026. It's 1.2 cents above the threshold, and 80% of that is 0.96 cents. Subtract that from 1.5 cents and the plant keeps 0.54 cents per kWh. A 1,100 MW reactor running at 92% produces about 8.9 billion kWh a year, so that's roughly $48 million of credit. At 2.6 cents or less it would earn the full $133 million.

Gross receipts include more than energy sales. They count electricity "services or products" sold with the power and, under Section 45U(b)(2)(B), any payments from a federal, state or local zero-emission credit (ZEC) program. The one exception: ZEC payments are left out if the state program is itself reduced by the full 45U credit. That rule matters in states like Illinois and New York that pay nuclear plants for their zero-carbon attributes. Contract revenue from a long-term power purchase agreement with a data center also counts, which is why high-priced nuclear deals can leave little or no 45U.

Which nuclear plants qualify for 45U?

A plant qualifies if the taxpayer owns it, it uses nuclear energy to make electricity, it isn't an advanced nuclear facility under Section 45J, and it was placed in service before August 16, 2022. The power must be sold to an unrelated person. New reactors and added capacity use Section 45Y or 48E instead.

That leaves three federal nuclear credits, each for a different situation:

• Section 45U covers the existing fleet through 2032. It's the only one tied to market prices.

• Section 45Y and Section 48E, the technology-neutral Production Tax Credit (PTC) and Investment Tax Credit (ITC), cover new reactors and capacity additions placed in service after 2024. Nuclear isn't subject to the 2027 cutoff that the One Big Beautiful Bill Act imposed on wind and solar. See our Section 48E guide and ITC vs. PTC comparison.

• Section 45J pays 1.8 cents per kWh for 8 years to advanced reactors that hold a share of its 6,000 MW national limit. It's claimed on Part I of Form 7213.

Reactors that were shut down and are coming back are a special case. EIA notes that the owners of Palisades in Michigan and the Crane Clean Energy Center (formerly Three Mile Island Unit 1) in Pennsylvania report those units as "out of service" rather than retired. Which credit a restarted unit can claim depends on facts such as its original in-service date and any new capacity, so restart owners should get a written tax opinion. Nuclear plants that also make hydrogen face a separate set of rules, covered in our nuclear hydrogen and 45V guide.

How do you claim the 45U credit?

Owners claim 45U on Part II of IRS Form 7213, Nuclear Power Production Credit, and carry it to Form 3800 with other general business credits. You need annual kWh produced and sold to unrelated buyers, total gross receipts including any ZEC payments, and prevailing wage records for repair and alteration work.

The IRS's Form 7213 page confirms that Part I is for Section 45J and Part II is for Section 45U, with current instructions dated December 2025. The credit is computed plant by plant, so an owner with several plants needs revenue data for each.

Plan for the general business credit limit too. A corporation can use credits against only part of its tax bill each year, and unused credits carry forward. Our general business credit guide explains the math, and the Form 3800 instructions walk through the filing.

Can 45U credits be sold or paid out in cash?

Yes. Section 45U credits can be sold to unrelated taxpayers for cash under Section 6418 transferability, after registering with the IRS. Tax-exempt owners such as public power utilities can instead take elective pay under Section 6417 and receive the credit as a direct payment.

Nuclear owners that can't use all their credits often sell them. Production credits traded at an average of about 93 cents per dollar of credit in 2026, according to Crux's mid-year market review, and buyers favor large, investment-grade sellers. Because 45U depends on the year's prices, buyers usually wait for actual revenue data or require the seller to cover any shortfall. Our guides to tax credit pricing and elective pay cover both routes, and you'll need IRS pre-filing registration either way.

What did the One Big Beautiful Bill Act change for 45U?

The One Big Beautiful Bill Act kept 45U through 2032 but added foreign entity limits. No credit is allowed for tax years beginning after July 4, 2025 if the owner is a specified foreign entity, and for tax years beginning two years after enactment if the owner is a foreign-influenced entity.

These limits were added as Section 45U(c)(3) by section 70510 of Public Law 119-21. Unlike the prohibited foreign entity rules for wind and solar, they're about who owns the plant, not where its fuel or parts come from. Our FEOC rules guide covers the wider rules.

The bigger change in the market is demand. Hyperscale data centers are signing long-term contracts for nuclear power. Those contracts lift receipts, and higher receipts reduce 45U, so the credit matters most for plants that still sell into weak wholesale markets.

Sources

• 26 U.S.C. 45U, Zero-emission nuclear power production credit

• IRS, Notice 2026-41, 2026 inflation adjustment factors for 45U, 45V and 45Z (Internal Revenue Bulletin 2026-29)

• IRS, Notice 2025-37, 2025 inflation adjustment factors (Internal Revenue Bulletin 2025-30)

• IRS, Section 45U reduction amount rate updated by the inflation adjustment

• IRS, About Form 7213, Nuclear Power Production Credit

• U.S. Energy Information Administration, How many nuclear power plants are in the United States?

• Crux, Takeaways from clean energy finance in H1 2026