# Prop. Treas. Reg. § 1.6417-2: Rules for elective payment elections.

Proposed regulation, not in force. REG-121244-23, 91 FR 5160, published 2026-02-04 <https://www.federalregister.gov/documents/2026/02/04/2026-02246/section-45z-clean-fuel-production-credit>. Interprets 26 U.S.C. § 6417.

Par. 6. Section 1.6417-2 is amended by revising paragraphs (c)(4) and (f) to read as follows:

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(c) * * *

(4) Credits must be determined with respect to the applicable entity or electing taxpayer. Any credits for which an elective payment election is made must have been determined with respect to the applicable entity or electing taxpayer. An applicable credit is determined with respect to an applicable entity or electing taxpayer if the applicable entity or electing taxpayer owns the underlying applicable credit property and conducts the activities giving rise to the credit or, if ownership is not required to give rise to the applicable credit, such as a credit under section 45Z or section 45(d)(3)(C), the applicable entity or electing taxpayer must conduct the activities giving rise to the credit. In the case of section 45X (under which ownership of applicable credit property is also not required, but for which rules related to contract manufacturing arrangements may be applicable), the applicable entity or electing taxpayer must be considered (under the section 45X regulations) the taxpayer with respect to which the section 45X credit is determined. Thus, no election may be made under this section for any credits transferred pursuant to section 6418, allowed pursuant to section 45Q(f)(3), acquired by a lessee from a lessor by means of an election to pass through the credit to a lessee under former section 48(d) (pursuant to section 50(d)(5)), owned by a third party, or otherwise not determined with respect to the applicable entity or electing taxpayer.

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(f) Applicability dates —(1) In general. Except as otherwise provided in this paragraph (f), this section applies to taxable years ending on or after March 11, 2024. For taxable years ending before March 11, 2024, taxpayers, however, may choose to apply the rules of §§ 1.6417-1 through 1.6417-4 and 1.6417-6, provided the taxpayers apply the rules in their entirety and in a consistent manner.

(2) Paragraph (c)(4). Paragraph (c)(4) of this section applies to taxable years ending on or after [date of publication of final regulations in the Federal Register ]. For taxable years ending before [date of publication of final regulations in the Federal Register ], see § 1.6417-2(c)(4) as contained in 26 CFR part 1, revised April 1, 2025.