Most buyers treat transferable tax credits as a year-end purchase: run the numbers in the fall, buy down the liability before the tax return deadlines. In 2026, that timing can work against you. By the time most teams go looking in Q4, other buyers have already engaged the best-documented credits, and what’s left needs more diligence. The question for your tax team and your CPA is whether you can defend the purchase three years from now, and that defense is harder to build the longer you wait.
Here are some considerations:
1. The pool of eligible credits is finite
The transferable credit market is active, but the supply of credits a diligent buyer can comfortably defend is limited, and federal policy is reducing it over time.
The 2025 budget reconciliation law (OBBBA) phased down the clean-energy credits. For wind and solar, projects that begin construction after July 4, 2026 must be placed in service by December 31, 2027 to qualify for the 45Y production credit or 48E investment credit. As those deadlines pass, fewer new qualifying projects enter the pipeline, which tightens the pool of well-documented credits available to buy.
So waiting means competing for a smaller set of strong credits.
2. Early buyers get more time for thoughtful diligence
Starting earlier mostly buys time: time to confirm tax capacity, evaluate documentation, negotiate protections, and coordinate with clients/advisors, instead of compressing all of it into the weeks before year-end.
3. Buying early provides more options
Demand tends to concentrate later in the year. Corporate buyers make quarterly estimated tax payments and often line up credit purchases with those dates, so more buyers arrive as the deadlines approach. Buyers who hold off until their tax liability is fully settled often start buying late, alongside everyone else who waited, when selection is tightest.
4. Diligence in 2026 is heavier than it was in 2024
Two of the OBBBA changes drive most of the added work, and both take time buyers only have if they start early.
- Prohibited foreign entities. Facilities, storage, or components receiving material assistance from a prohibited foreign entity can lose eligibility for certain credits. Material-assistance cost-ratio thresholds step up from 40% in 2026 to 60% after 2029. When two credits look otherwise similar, supply-chain certifications are now the deciding factor.
- Begin-construction safe harbor. On June 6, 2026, a federal court vacated IRS Notice 2025-42, technically restoring the 5% safe harbor for wind and large solar. Counsel expects the government to seek a stay and appeal, with possible retroactive effect, so buyers shouldn’t treat the question as settled. Ask for a defensible begin-construction file, continuity documentation, and updated reps and warranties.
What acting early buys you
Executing these transactions can take anywhere from a few weeks to several months, depending on complexity. Inside that window, a buyer has to:
- Confirm tax capacity and target size.
- Get finance and tax stakeholders on the same page.
- Review documentation and negotiate protections.
- Time the close against quarterly payments.
A year-end start compresses every step into the weeks before the books close. Starting earlier gives you time to compare credits on quality and walk away from any that don’t fit while selection is still wide.
How Armagh helps
We operate inside the guidelines that CPAs, financial advisors, and attorneys set for their clients, source and pre-underwrite credits to your risk standards, structure the protections, and assemble an audit-ready file for every transaction, so the credit you buy is one you can defend under examination.
Expecting meaningful federal tax liability in 2026? Assess your tax capacity and review available credits before the strongest ones are committed. Schedule a call and we’ll walk through what a defensible, well-timed purchase looks like for your team.
