EGG SAVE Act of 2026

The EGG SAVE Act of 2026 amends the Internal Revenue Code to establish a new federal tax credit called the **Layer Operation Efficiency Equipment Credit** (Section 45BB), which is added to the General Business Credit. The credit offsets a portion of the expenses incurred by businesses to purchase, install, and make necessary facility modifications for in-ovo (in-egg) sex identification equipment.

* **Commercial Egg Hatchery Facilities:** Businesses located in the United States whose primary purpose is hatching chicks for commercial egg production. * **The Department of the Treasury:** The Secretary of the Treasury is required to administer the credit, create regulations, and establish rules to reclaim (recapture) tax credits if eligibility criteria are no longer met.

* **Tax Credit Eligibility:** Taxpayers who place qualified in-ovo sex identification equipment into service at a U.S. commercial egg hatchery can claim a tax credit on eligible expenses. * **Equipment Standards:** To be eligible, the equipment must: * Use optical or non-optical technology to determine the sex of bird embryos before they hatch. * Achieve an accuracy rate of at least 95%. * Be placed in service in a U.S. commercial egg hatchery. * Meet any additional standards set by the Secretary of the Treasury. * **Tax Basis Adjustments:** Taxpayers who claim the credit are required to reduce the tax basis of the equipment by the amount of the credit received. * **Credit Recapture:** The Secretary of the Treasury is required to set rules to recapture the credit if the equipment loses eligibility or if the taxpayer stops operating a commercial egg hatchery. If a credit is recaptured, the equipment's tax basis increases by the recaptured amount.

The bill provides a temporary tax credit covering a percentage of qualified equipment, installation, and facility modification costs based on the calendar year the property is placed in service: * **2027:** 50% of qualified expenses. * **2028:** 40% of qualified expenses. * **2029:** 30% of qualified expenses. The tax credit applies to property placed in service after December 31, 2026, for tax years ending after that date. No tax credit is available for property placed in service after December 31, 2029.

* **Location Limit:** Equipment used predominantly outside the United States does not qualify for the credit, subject to standard statutory exceptions under tax law. * **Accuracy Threshold:** Equipment that fails to meet the 95% accuracy rate does not qualify. * **Expiration:** The credit expires entirely for property placed in service after December 31, 2029.

This bill offers a temporary tax credit from 2027 through 2029 covering 30% to 50% of the costs for U.S. commercial egg hatcheries to buy and install equipment that determines the sex of unhatched chick embryos with at least 95% accuracy.