IRS Form 7210 – In the evolving landscape of renewable energy incentives, the Clean Hydrogen Production Credit stands out as a key provision from the Inflation Reduction Act (IRA) of 2022. This tax credit, claimed through IRS Form 7210, encourages the production of low-emission hydrogen to support clean energy transitions. If you’re involved in hydrogen production facilities, understanding how to claim this credit can provide significant financial benefits. This article covers everything you need to know about IRS Form 7210, including eligibility, calculation, filing processes, and more.
What is the Clean Hydrogen Production Credit?
The Clean Hydrogen Production Credit, under section 45V of the Internal Revenue Code, offers a tax incentive for producing qualified clean hydrogen at eligible facilities. Enacted as part of the IRA, it provides a credit per kilogram of hydrogen produced, based on the lifecycle greenhouse gas (GHG) emissions rate. The credit applies to hydrogen produced after 2022 at facilities placed in service during a 10-year window, with construction starting before January 1, 2028.
Qualified clean hydrogen is defined as hydrogen produced through a process resulting in lifecycle GHG emissions of no more than 4 kilograms of CO2 equivalent (CO2e) per kilogram of hydrogen. This emissions rate must be determined using the Department of Energy’s (DOE) 45VH2-GREET model or, for unlisted processes, through a provisional emissions rate petition to the DOE. The production must occur in the United States or its territories, for sale or use in the taxpayer’s trade or business, and be verified by an unrelated third party.
This credit cannot be claimed if the facility uses carbon capture equipment eligible for the section 45Q credit in the current or prior tax years. Facilities modified after 2022 to produce clean hydrogen are considered placed in service on the modification completion date.
Who Qualifies for the Clean Hydrogen Production Credit?
To be eligible for the credit claimed on IRS Form 7210:
- Facility Ownership: The taxpayer must own the qualified clean hydrogen production facility.
- Production Location: Hydrogen must be produced in the U.S. or its territories.
- Emissions Threshold: Lifecycle GHG emissions must be 4 kg CO2e/kg H2 or less, verified using the most recent GREET model.
- Verification: An unrelated party must verify the production, sale, or use of the hydrogen. Attach the verification report to your tax return.
- No Overlapping Credits: Facilities cannot claim both this credit and the section 45Q carbon capture credit for the same equipment.
Certain entities, such as tax-exempt organizations or governments, may elect direct payment under section 6417, while others can transfer the credit under section 6418. Partnerships and S corporations must file a separate Form 7210 for each facility and report shares to partners/shareholders.
Pre-filing registration is required for elective payments or transfers via the IRS portal.
How to Calculate the Clean Hydrogen Production Credit?
The credit amount is calculated by multiplying the applicable amount (inflation-adjusted base of $0.60 per kg) by the kilograms of qualified clean hydrogen produced. For 2025, the inflation-adjusted base rates are:
| Emissions Rate (kg CO2e/kg H2) | Applicable Percentage | Base Credit per kg |
|---|---|---|
| Less than 0.45 | 100% | $0.637 |
| 0.45 to less than 1.5 | 33.4% | $0.213 |
| 1.5 to less than 2.5 | 25% | $0.159 |
| 2.5 to 4.0 | 20% | $0.127 |
The base credit can increase by a factor of 5 if prevailing wage and apprenticeship (PWA) requirements are met during construction, alterations, and repairs. This includes paying laborers at least prevailing wages and ensuring a percentage of labor hours (10-15%) are performed by qualified apprentices.
Reductions apply if tax-exempt bonds finance the facility, scaling the credit down based on the bond proceeds relative to total capital costs.
Use one emissions rate per production process, aggregated across the facility if multiple processes exist. Inflation adjustments are published annually (e.g., Notice 2025-37 for 2025).
Step-by-Step Guide to Filing IRS Form 7210
- Complete Form 7210: Use a separate form for each qualified facility. Enter facility details in Part I, including placement in service date, emissions rate, and PWA compliance (attach Form 7220 if claiming the increased credit).
- Attach Required Documents: Include the verification report from an unrelated party and any DOE provisional emissions documentation.
- Report on Form 3800: Carry the credit from Form 7210 to Form 3800, General Business Credit, and attach to your tax return.
- File Annually: Submit with your federal income tax return for each year the credit is claimed during the 10-year period.
For partnerships or S corporations, attach Form 7210 to the entity return and provide K-1 schedules to owners.
Required Documentation and Recordkeeping
Maintain records for IRS verification, including:
- Verification reports and DOE emissions documentation.
- Proof of PWA compliance (e.g., wage records, apprenticeship agreements).
- Books and records substantiating production amounts and emissions calculations.
Failure to meet PWA requirements may trigger penalties or recapture via Form 4255.
Download IRS Form 7210 and Instructions
To get started, download the latest version of IRS Form 7210 directly from the official IRS website: https://www.irs.gov/pub/irs-pdf/f7210.pdf.
For detailed guidance, refer to the Instructions for Form 7210: https://www.irs.gov/instructions/i7210.
Recent Updates and Considerations for 2026
As of 2026, the credit remains available for facilities with construction beginning before 2028, but note that section 45V is set to terminate for facilities starting construction after 2027 per recent legislation. Always check for annual inflation adjustments and any regulatory changes from the Treasury or IRS.
Frequently Asked Questions (FAQs) About IRS Form 7210
What if my facility uses a non-standard production process?
Petition the DOE for a provisional emissions rate and attach the approval to Form 7210.
Can I claim the credit for hydrogen produced before 2023?
No, the credit applies only to production after 2022 at qualifying facilities.
How do I verify hydrogen production?
Engage a qualified unrelated verifier (e.g., accredited by ANSI or California Air Resources Board) to prepare a report under penalties of perjury.
Is there a way to monetize the credit without tax liability?
Yes, through elective payments (for applicable entities) or credit transfers to unrelated parties.
By leveraging the Clean Hydrogen Production Credit via IRS Form 7210, businesses can play a pivotal role in advancing sustainable energy while benefiting from substantial tax savings. Consult a tax professional for personalized advice based on your specific situation.