Check out our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for December 15, 2025 – December 22, 2025.
December 15, 2025: The IRS issued Notice 2026-2, providing an update on weighted average interest rates, yield curves, and segment rates. The notice specifically focused on the corporate bond monthly yield curve, corresponding spot segment rates used for purposes of Internal Revenue Code (Code) Section 417(e)(3), and 24-month average segment rates for purposes of Code Section 430(h)(2). Notice 2026-2 also provides the interest rate for 30-year Treasury securities for purposes of Code Section 417(e)(3)(A)(ii)(II), as in effect for plan years beginning before 2008, as well as the 30-year Treasury weighted average rate for purposes of Code Section 431(c)(6)(E)(ii)(I).
December 15, 2025: The IRS issued Revenue Ruling 2026-2, providing various prescribed rates for federal income tax purposes for January 2026. The prescribed rates include:
Short-, mid-, and long-term applicable federal rates for certain debt instruments in the Code.
Section 42(b)(1) housing credit appropriate percentages.
The deemed rate of return for calendar year 2026 transfers made to pooled income funds, as described in Section 642(c)(5).
The average of the applicable federal mid-term rates for the 60-month period ending December 31, 2025.
December 19, 2025: The IRS issued Notice 2026-1, providing interim guidance related to the credit for carbon oxide sequestration under Code Section 45Q pending the forthcoming proposed regulations removing reporting obligations related to the geological sequestration of carbon dioxide imposed under subpart RR of 40 CFR part 98. The notice specifically provides a safe harbor for determining eligibility for qualified carbon oxide, captured and disposed of in secure geological storage and not used as a tertiary injectant in a qualified enhanced oil or natural gas recovery project, during calendar year 2025. Notice 2026-1’s safe harbor applies if the US Environmental Protection Agency does not launch the electronic Greenhouse Gas Reporting Tool for filers to prepare and submit information required under subpart RR by June 10, 2026. Taxpayers can rely on the safe harbor to demonstrate compliance with subpart RR requirements when determining the Code Section 45Q credit related to the 2025 Calendar Year Secure Geological Storage.
December 19, 2025: The IRS issued Notice 2026-6, extending the transition period in Revenue Ruling 2025-4 for states administering paid family and medical leave (PFML) programs and employers participating in PFML programs. The extension is for an additional year and only as it relates to the medical leave benefits a state pays to an individual that can be attributed to employer contributions.
December 22, 2025: The IRS issued Notice 2026-3, providing relief from Code Section 6654 and 6655 additions of tax for underpayments of estimated income tax by taxpayers making valid Code Section 1062(a) elections.
December 22, 2025: In Announcement 2026-1, the IRS declared its intent to issue guidance related to Code Section 6435. That guidance, intended for taxpayers that paid Code Section 4081 tax on diesel fuel or kerosene and later removed such fuel as dyed fuel, will inform taxpayers of the process to request a refund. The US Department of the Treasury and the IRS request taxpayers to not submit any Code Section 6435 claims until this guidance is issued in early 2026. The IRS will not process any claims until that guidance is issued.
The IRS also released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandums, and Chief Counsel Advice).
Suzanne Golshanara, a law clerk in the Washington, DC, office, also contributed to this post.
