February 2026: IRS USA Tax Updates

Here’s what your firm should be aware of right now to better guide and support your clients.

Treasury & IRS Issue Proposed Rules for Updated 45Z Clean Fuel Production Credit

The Treasury Department and IRS have issued proposed regulations detailing how domestic producers can qualify for and calculate the revised 45Z Clean Fuel Production Credit. The guidance reflects key changes under the One, Big, Beautiful Bill, including an extension through 2029, stricter feedstock sourcing rules, updated emissions standards, and enhanced anti-abuse safeguards.

Read the article here: Treasury, IRS issue proposed regulations on the clean fuel production credit under the One, Big, Beautiful Bill | Internal Revenue Service

IRS Encourages Taxpayers to Create Individual Online Accounts for Secure Access

The IRS urged taxpayers to create an IRS Individual Online Account to securely access tax records, manage payments, view notices, and protect against identity theft. The platform now allows users to download key tax documents (such as Forms W-2 and 1099) for tax years 2023–2025, offering enhanced convenience and digital access to over 200 IRS notices.

Read the article here: Create an IRS Individual Online Account today for security and convenience | Internal Revenue Service

IRS Enhances Tax Pro Account to Support Tax Professional Businesses

The IRS has expanded Tax Pro Account to include business-level features for firms operating under a Centralized Authorization File (CAF) number. The update enables authorized business representatives to manage employee access, link CAF numbers to EINs, and oversee client authorizations digitally, streamlining workflows and reducing reliance on paper-based processes for accounting and tax-preparation firms. 

Read the article here: IRS announces next expansion of Tax Pro Account to support tax professional businesses | Internal Revenue Service

Treasury & IRS Issue Guidance on Prohibited Foreign Entity Restrictions for Energy Tax Credits

The Treasury Department and IRS released Notice 2026-15 providing interim guidance on determining whether clean electricity facilities, energy storage technologies, or eligible components receive material assistance from a prohibited foreign entity (PFE), which could disqualify them from certain energy tax credits. The notice outlines calculation methods, interim safe harbors, and reliance rules while Treasury prepares proposed regulations, and invites public comments within 45 days. 

Read the article here: Treasury, IRS provide guidance for certain energy tax credits regarding material assistance provided by prohibited foreign entities under the One, Big, Beautiful Bill | Internal Revenue Service

Treasury & IRS Provide Interim Guidance on 100% Depreciation for Qualified Production Property

The Treasury Department and IRS issued Notice 2026-16 outlining interim guidance for a new special depreciation allowance under the One, Big, Beautiful Bill. The provision allows taxpayers to elect up to 100% depreciation on qualified production property placed in service after July 4, 2025, and before Jan. 1, 2031, with regulations forthcoming and a 60-day public comment period open. 

Read the article here: Treasury, IRS issue guidance on special depreciation allowance for qualified production property, announce upcoming proposed regulations under the One, Big, Beautiful Bill | Internal Revenue Service

IRS Tax Tips

IRS Reminds Taxpayers About EITC Eligibility and Delayed Refund Issuance

The IRS is urging eligible workers to review their qualifications for the Earned Income Tax Credit (EITC), a refundable credit that can significantly reduce tax liability and boost refunds for low- to moderate-income families. Although many taxpayers may receive refunds by early March if they e-file with direct deposit, federal law requires the IRS to hold EITC-related refunds until at least Feb. 21, 2026. 

Read the article here: Earned Income Tax Credit: A valuable credit that supports millions of families | Internal Revenue Service

IRS Announces New 2026 Deductions and Standard Deduction Updates

For the 2026 filing season, the IRS introduced new deductions for seniors, tipped workers, overtime pay, and qualified vehicle loan interest—available to both itemizers and non-itemizers, subject to income limits. For tax year 2025, the standard deduction is $15,750 (single), $31,500 (joint), and $23,625 (head of household). 

Read the article here: New and enhanced deductions for individuals | Internal Revenue Service

IRS Highlights 2026 Tax Changes and Benefits for Seniors

The IRS reminds taxpayers age 65 and older about key updates for the 2026 filing season, including a new enhanced senior deduction of $6,000 per eligible individual ($12,000 for qualifying joint filers) available for tax years 2025–2028, subject to income phaseouts. Seniors may also qualify for the Earned Income Tax Credit, and free filing assistance is available through VITA, TCE, and AARP Tax-Aide programs. 

Read the article here: 2026 filing season updates and resources for seniors | Internal Revenue Service