Several important federal tax changes taking effect January 1, 2026 that may affect NEFI member companies and their customers.

RESIDENTIAL ENERGY TAX CREDITS EXPIRE

The 'One Big Beautiful Bill Act' (H.R. 1) accelerated the expiration of several energy tax incentives originally introduced under the Inflation Reduction Act of 2022. The below credits are no longer available for equipment installed after December 31, 2025. Companies that have been marketing the availability of these tax incentives should cease doing so.

Section 25C: Energy Efficient Home Improvement Credit
This credit previously provided homeowners with a 30% tax credit (up to $600 annually) for qualified high-efficiency HVAC equipment, including oil-fired furnaces and boilers meeting ENERGY STAR efficiency standards and certified for use with renewable fuel blends of 20% or higher. It also offered 30% (up to $2,000) for qualified heat pump systems and wood/pellet fuel stoves. This credit terminates after December 31, 2025. To qualify, equipment must have been installed and placed into service before this date.

Section 25D: Residential Clean Energy Credit
This credit offered homeowners up to 30% for installation of residential solar panels, solar water heaters, wind turbines, geothermal heat pumps, fuel cells, and battery storage. This credit also terminates after December 31, 2025.

Section 179D: Energy Efficient Commercial Buildings Deduction
This deduction, which offered up to $5.00 per square foot for energy-efficient improvements in qualified commercial buildings, remains available but will terminate for projects that begin construction after June 30, 2026.

For a complete list of tax provisions affected by the One Big Beautiful Bill Act, see the NEFI summary document available via the members-only portal at www.nefi.com.

FUEL EXCISE TAXES: WHAT MEMBERS SHOULD KNOW

Oil Spill Liability Trust Fund Tax Expires
The 9-cent-per-barrel tax that finances the federal Oil Spill Liability Trust Fund expires on December 31, 2025. Congress recessed without extending this tax, and no extension legislation has been introduced in the 119th Congress to date.

This tax was paid by refinery operators on crude oil received at U.S. refineries and by importers on petroleum products entering the U.S. It did not apply directly to wholesale or retail fuel marketers. Any pricing impact would be reflected upstream in wholesale rack prices.

Hazardous Substance Superfund Tax Continues
The Hazardous Substance Superfund tax remains in effect at an inflation-adjusted rate of 18 cents per barrel for calendar year 2026. Like the expired Oil Spill tax, the Superfund tax is paid by refiners and importers, not by parties below the terminal rack. This cost is typically incorporated into wholesale rack prices rather than appearing as a separate line item.

Heating Oil Excise Taxes Unchanged
Heating oil continues to be exempt from federal Highway Trust Fund excise taxes. The only federal excise tax applicable to heating oil is the Leaking Underground Storage Tank (LUST) tax of 0.1 cents per gallon, which remains unchanged for 2026.

IRS STANDARD MILEAGE RATES FOR 2026

The IRS has announced the following standard mileage rates effective January 1, 2026:

• Business Use: 72.5 cents per mile (up 2.5 cents from 2025)
• Medical Use: 20.5 cents per mile (down 0.5 cents from 2025)
• Charitable Use: 14 cents per mile (unchanged)

These rates apply to gasoline, diesel, hybrid, and fully electric vehicles.

FOR MORE INFORMATION
Contact NEFI Regulatory Counsel Rick Schweitzer at rpschweitzer@rpselgal.com or (703) 946-2548 with any questions or if you need any more information.