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Read this article if you are a renewable energy developer or investor.

Enacted as part of the One Big Beautiful Bill Act (OBBBA), the foreign entity of concern (FEOC) requirements are designed to reduce US reliance on certain foreign suppliers in the renewable energy sector. These rules bar projects with prohibited foreign entity (PFE) ties from claiming clean energy tax credits and take effect for projects initiated after December 31, 2025. 

PFEs include entities with direct or indirect ties to the covered nations that include China, North Korea, Russia, and Iran, with a particular focus on China due to its dominant role in renewable energy supply chains.

Limits on material assistance from PFEs 

Projects must now meet minimum sourcing requirements for components from non-prohibited foreign entities. Central to this is the material assistance cost ratio, with increasing thresholds over time for the proportion of project costs that must be sourced from non-prohibited foreign entities.  

US-based suppliers may be classified as PFEs if they rely heavily on PFE capital, components, raw materials, or intellectual property. 

Restrictions on ownership, debt, and management involvement 

An entity cannot claim tax credits if it has excessive PFE equity, debt, or management involvement. Both specified foreign entities (SFEs) and foreign influenced entities (FIEs) are considered PFEs and are not entitled to tax credits. SFEs are entities controlled by foreign individuals or governments from the covered nations, while FIEs are entities influenced by the covered nations. 

Contracts with PFEs 

Existing contracts and technology licenses with PFEs need to be identified and scrubbed of any provisions that grant the counterparty effective control over the taxpayer or project. New contracts with PFEs are high-risk and should be structured carefully so that they clearly do not grant control or influence. New technology licenses with PFEs are automatically treated as giving the licensor effective control and the related project will not be eligible for tax credits.  

Additional guidance from the IRS is expected before December 31, 2026. 

Penalties for non-compliance with FEOC 

The IRS has six years to challenge whether a project improperly benefited from material assistance from PFEs. The penalties for failing to comply with the FEOC requirements are severe: 

• There is a 100% disallowance of tax credits if the requirements are not met. 
• Investors face a 20% penalty based on the underpayment of their tax liability if violations are found. 

Navigating FEOC requirements  

To navigate these new rules, entities should: 

• Obtain clear representations from equipment vendors and EPC contractors confirming they are not PFEs. 
• Secure certificates from suppliers stating that products were not made by PFEs and that the supplier does not know or have reason to know of any such entities in their supply chain. 
• Evaluate ownership, debt, and management each year to ensure the company is not controlled or influenced by the covered nations.  
• Avoid embedded technology licenses in equipment procurement contracts, which could create indirect foreign control. 
• Be aware of the 10-year recapture provision. For projects placed in service in 2028 or later, the full Investment Tax Credit (ITC) must be repaid if any contractual arrangements give PFEs effective control.

While further IRS guidance is expected in 2026, the intent of the new FEOC requirements is to reduce US dependence on foreign suppliers from covered nations and to prevent prohibited foreign individuals and entities from controlling or benefiting from clean energy tax credits. Early identification of affected contracts and proactive compliance will be essential for developers and investors. Berry Dunn’s renewable energy team has a deep understanding of the FEOC requirements and can assist with navigating these changes. Learn more about our team and services. 

When CMS previewed its streamlined Medicaid Enterprise System (MES) templates at the Medicaid Enterprise Systems Conference (MESC) in August 2025, the message was clear: change is coming. And guess what? Change arrived with the start of the new year when CMS officially released eight new templates to standardize processes, improve oversight, and accelerate federal reviews. States and territories now have six months to adopt these templates, with full compliance required by July 1, 2026.

The clock is ticking! Early adoption isn’t just encouraged, it’s strategic. Here’s what these templates are, why they matter, and how you can confidently prepare for the required adoption of these templates and related processes.

What’s new? The eight CMS templates at a glance

CMS’ new artifacts support the full MES lifecycle, from planning and procurement to operations and certification. Here’s a quick overview:

1. MES APD Template
A standardized structure for Planning, Implementation, Update, and As-Needed APD submissions, supporting MMIS and E&E individually or combined.

Why it matters: Prescribes updated and uniform expectations for APD sections, including reducing or eliminating non-essential content.

2. MES Operational APD (OAPD) Template
A uniform format for operational APDs used to maintain and enhance existing modules.

Why it matters: Enhances transparency into operational activities by clearly defining scope, funding needs, and timelines, improving predictability for Medicaid agencies and CMS while supporting continuous system improvement.

3. Medicaid Detailed Budget Table (MDBT)
A common budget layout that simplifies federal review by organizing costs predictably.

Why it matters: Integrates MES and E&E funding into a single consolidated MDBT, promoting greater alignment across the Medicaid program and providing a more holistic perspective on SMAs' budgets and expenditures.

4. Operational Report Workbook (ORW)
Monthly operational reporting aligned to maintain enhanced federal match and improve data consistency.

Why it matters: Creates a consistent, module-based reporting structure across states, improving data quality, aggregation, and CMS visibility into Medicaid operations.

5. Analysis of Alternatives (AoA) Template
A structured approach to document solution options, risks, costs, and reuse opportunities.

Why it matters: Supports sound procurement decision-making and compliance with 45 CFR §95.610.

6. Project Status Report
A monthly summary of milestones, risks, funding request status, and progress.

Why it matters: Improves oversight and accountability by offering a concise, repeatable snapshot of progress, risks, and financial posture, enabling Medicaid agency leadership and CMS to make informed decisions.

7. MES Procurement Document Checklist
Aligns solicitations (RFPs/RFQs) with CMS expectations and federal regulations.

Why it matters: Helps ensure procurement packages fully align with CMS expectations, meets or includes citations for Conditions for Enhanced Funding, minimizing rework, reducing procurement delays, and setting Medicaid agencies up for smoother system certification.

8. Streamlined Modular Certification (SMC) Intake Form
The intake form for MES module certification, replacing prior EVV intake.

Why it matters: Clarifies certification evidence requirements early in the lifecycle, reducing ambiguity for vendors and states/territories and paving the way for efficient, timely CMS certification.

Why the change—and why now?

CMS’ goal is clear: reduce administrative burden, improve consistency, and accelerate federal review cycles. These templates create a common language for Medicaid agencies, vendors, and CMS—making compliance easier and oversight stronger.

Six months may sound like plenty of time, but consider the following as a sampling of what’s needed:

• Active and upcoming MES deliverables (ORWs, project status reporting, APDs, and procurements) will need to transition to new templates before July 1
• Procurements submitted to CMS must include a completed CMS Procurement Document Checklist demonstrating that the Medicaid Agency has addressed each CMS expectation within the procurement.
• Operational reporting will require new data pipelines and project governance to help ensure accuracy of outcomes and metrics reporting.

Waiting will compress your compliance window and increase risks for non-compliance. Those who collaborate early and often with their CMS State Officer will benefit from smoother adoption and fewer surprises.

Your action plan

Here’s a practical roadmap to hit the July 1 deadline:

1. Mobilize now, develop your plan, and align with your State Officer

• Form a cross-functional team (program, IT, finance, procurement, PMO/PgMO) and establish a shared understanding of the requirements, the team’s roles, and the frequency with which the group connects to stay aligned in your compliance efforts.
• Create an inventory of APDs, active and planned procurements, forthcoming certifications, and status reports.
• Develop your proposed timeline for transitioning to the new templates. More specifically, identify the APD Packages (i.e., APDs, MDBTs), Procurements, Project Status Reports, and Templates the agency believes can be transitioned in the very near term versus a future update.
• Discuss your proposed plan for compliance with your Medicaid Agency’s CMS State Officer and align with their expectations. Lean into them as your partner for success.

2. Start small and stay aligned with your CMS State Officer

• Consider strategies for implementation, such as:
  • Converting one APD and MDBT as a “pathfinder” to set the standard, before fully implementing your plan for adoption of the new APD and MDBT templates.
  • Piloting the ORW and Status Report templates internally for one to two projects to validate data sources and reporting cadence.
• Align internally on how the AoA fits into your existing strategic planning and procurement processes, and draft an AoA for an upcoming decision to exercise the new format.
• Regularly discuss your compliance efforts with your CMS State Officer, soliciting their feedback and guidance along the way.

3. Ensure alignment across templates

• Map dependencies across templates (e.g., ORW ↔ APDs, AoAs within APDs ↔ procurements) to help ensure data, assumptions, and timelines remain consistent as templates are adopted.
• Coordinate rollout sequencing so related templates are implemented together or in a logical order, reducing rework and misalignment across planning, reporting, and procurement activities.
• Establish shared governance and review checkpoints to validate cross-template consistency before submission to CMS.

4. Scale and train

• Expand beyond initial pilots to full-scale implementation of the new templates across APDs, ORWs, procurements, status reports, and related artifacts well in advance of the July 1 deadline.
• Work across the enterprise, including program, IT, finance, procurement, PMO, and vendors, to ensure shared understanding, consistent data, and aligned execution as adoption scales.
• Provide targeted, role-based training for agency staff and supporting vendors to reinforce expectations, clarify template interdependencies, and support consistent, high-quality submissions.
• Continue proactive engagement with CMS throughout implementation by seeking clarifications, validating interpretations, and offering feedback to inform ongoing refinement and successful compliance.

Common pitfalls to avoid

• Treating templates as a simple “copy‑paste” exercise, assuming that legacy content transfers over directly without evaluating whether requirements, processes, or context have changed and what new information needs to be added.
• Underestimating the effort to stand up ORW reporting; ORW and SMC Intake Forms typically require multi-vendor engagement and adoption, as well as discussions with SMA team members.
• Fragmenting ownership of adoption without a core team driving compliance with CMS expectations for template adoption, results in consistency issues.
• Limiting early engagement with your CMS State Officer without ongoing conversations to review your plan, ask questions, and gather feedback.

How BerryDunn can help

We’ve been tracking these changes and are ready to help Medicaid agencies and vendors move quickly toward adoption by:

• Conducting template walkthroughs and conversion sprints for APDs, MDBTs, status reporting, ORWs, and related artifacts.
• Facilitating AoA development and reuse analysis to support informed decision-making.
• Reviewing procurement materials to help ensure alignment with federal regulations and related APDs.
• Supporting certification readiness through SMC Intake Form preparation and evidence mapping.
• Delivering tailored training and practical playbooks aligned to agency staff and vendors.
• Providing a portfolio management solution capable of supporting your strategic planning, procurement, implementation, and certification activities—as well as the critical reporting needed to support federal compliance (i.e., AoA, APDs, Status Reporting, ORW)

July 1, 2026, will be here before we know it! Medicaid agencies acting now have a higher likelihood of compliance success and will also achieve stronger governance and clearer outcomes. The clock’s ticking and we’re here to help!

Reach out to Amber Davis or Brennan Pouliot to learn more about BerryDunn can help you implement the CMS’ new MES templates.

Resources

• CMS Streamlining Medicaid Enterprise Systems Templates
• SHO #25-003
• tHHS: Medicaid and HHS agency’s Portfolio Management Solution

As BerryDunn’s Healthcare Practice Group lead, Lisa Trundy-Whitten is closely attuned to the healthcare industry. From challenges faced by healthcare organizations to the solutions BerryDunn’s experts can provide, Lisa shares thoughtful insights for healthcare leaders.  

As we begin 2026, healthcare organizations have an opportunity to reset. Several years of sustained disruption have created a transformational moment for both operational and strategic realignment. Many organizations are transitioning from a period of reactive decision-making and are now better positioned to take a more intentional, proactive approach. As healthcare leaders, you’re beginning to see opportunities to restore margin, build resiliency, and boost strategic growth.

Positive signs in the industry 

While you continue to face ongoing challenges, there are encouraging signs across the healthcare continuum. Here are some examples: 

• Volume stabilization is occurring in many sectors. 
• Workforce shortages have declined. 
• Providers and payers are strengthening financial discipline with innovation. 
• Value-based pilots are growing. 
• Creative employee retention programs are being implemented. 
• Telehealth and Artificial Intelligence (AI) are on the rise. 

Pursue near-term wins 

Now is the time to re-align your clinical priorities with financial realities by: 

• Reassessing your service lines 
• Renegotiating payer contracts using better data 
• Improving cost transparency

Instead of pursuing major changes, consider making small, intentional adjustments such as:  

• Recalibrating productivity benchmarks 
• Using better revenue cycle processes to reduce denials 
• Improving forecasting 

All of these adjustments can create near-term wins that you can leverage to build momentum early in the year.  

Be intentional with your progress in 2026 

The trends that have challenged the industry continue to shape what we are seeing today: 

• Continued pressure on labor costs 
• Regulatory uncertainty and complexity 
• Ongoing scrutiny from lenders, regulators, and boards 

At the same time, there is a shift toward value-based care, outpatient migration, and greater reliance on data in decision-making. 

So, how do you respond to these challenges and changes? Our advice is to apply focus and discipline. By clearly defining your strategic priorities and directing funds accordingly, you can make the most of limited resources. 

Harness emerging technologies 

Rather than view emerging technologies like AI as optional experiments, thoughtfully embrace them as tools to boost efficiency, reduce costs, and improve care. AI can speed up revenue recovery, lower administrative burdens, improve clinical decisions, and enhance the patient experience.  

Are you wondering where to start? Identify the pain points where technology can deliver value for your organization. Consider focusing on specific initiatives like optimizing your revenue cycle, forecasting, compliance monitoring, or analytics, rather than leaping into broad, less focused initiatives. Keep it simple and small when beginning. Form an AI governance committee to prioritize use cases, manage risk, and scale what works.  

Sustainability often depends on making the right investments. A strategic investment in technology can lower long-term costs, mitigate risk, and enhance decision-making—all in support of your organization’s mission.

BerryDunn can help 

As you look ahead in 2026, there will be challenges. Rather than letting these obstacles define you, view them as opportunities to respond with more clarity, stronger discipline, and renewed confidence. The path to your organization’s success is recognizing and understanding the financial and regulatory landscape while thoughtfully adapting and investing in your future. 

If you need support, reach out to us to discuss ways we can guide you and help you improve outcomes. I encourage you to explore our comprehensive breadth of services and learn about our team of experts across healthcare practices. 

Best,

Lisa Trundy-Whitten

Read this article if you are a leader in the construction industry.

As the construction industry faces mounting pressure to reduce its environmental footprint, artificial intelligence (AI) is emerging as a powerful driver of change. From optimizing material usage to monitoring energy consumption, AI is helping companies build smarter, greener, and more efficiently than ever. 

The challenge of sustainability in construction 

Construction is responsible for nearly 40% of global carbon emissions, much of which results from inefficient design, material waste, and energy-intensive operations. As clients and regulators demand more sustainable practices, companies are turning to AI to meet these expectations without compromising quality or profitability. 

How AI can help 

1. Material optimization: AI algorithms can analyze building plans and recommend more sustainable or locally sourced materials. They also help reduce waste by predicting exact quantities needed, minimizing over-ordering and excess inventory. 
2. Energy modeling and monitoring: AI-powered tools simulate energy usage across different design scenarios, helping architects and engineers choose layouts that maximize efficiency. On job sites, AI can monitor real-time energy usage, identifying opportunities for efficiency gains and cost savings. 
3. Predictive maintenance: By continuously monitoring equipment and building systems, AI can anticipate failures before they occur. This proactive approach reduces downtime, extends asset life, and minimizes unnecessary replacements. 
4. Smart scheduling: AI analyzes weather patterns, labor availability, and supply chain data to optimize project schedules. This reduces idle time, avoids delays, and limits resource waste. 
5. Carbon tracking: AI platforms calculate a project’s carbon footprint from start to finish, offering insights into how design choices, transportation, and materials impact emissions, as well as how to reduce them. 

Real-world impact of AI 

Forward-thinking companies are already seeing results. Projects that integrate AI into their sustainability workflows report: 

• Up to 30% reduction in material waste 
• Around 20% improvement in energy efficiency 
• Faster compliance with green building certification requirements 

What’s next for AI in construction? 

As AI continues to advance, we expect to see deeper integration with the management of buildings and infrastructure, autonomous construction equipment, and even AI-assisted design. The future of sustainable construction isn’t just about building better; it’s about building smarter. 

BerryDunn’s construction team partners with clients to provide meaningful insights on best practices in building capacity, stabilizing cash flow in growth, reducing tax liabilities, capturing reimbursable local taxes, and navigating state nexus. Learn more about our team and services.  

Bonus depreciation is officially back at 100%, and the rules for 2026 look very different from what many taxpayers had been planning for. After years of preparing for the gradual phase-down under the Tax Cuts and Jobs Act (TCJA), the One Big Beautiful Bill Act (OBBBA) of 2025—along with new IRS guidance in Notice 2026-11—restores full expensing for most qualified property and establishes a clearer long-term framework.

BerryDunn's tax experts have compiled a comprehensive summary of what changed, how the rules work now, and what businesses need to know as they plan for upcoming capital investments.

Notice 2026-11: Key updates driving the 2026 bonus depreciation rules

Notice 2026-11 serves as the IRS's bridge between the old TCJA regulations and the new OBBBA system. Rather than issuing a complete rewrite of §1.168(k)-2, the IRS introduced a "date substitution" approach to quickly align existing regulations with the new law.

New effective dates for determining 100% bonus depreciation

To determine whether property qualifies for the renewed 100% bonus rate, taxpayers must now:

• Use January 19, 2025, in place of September 27, 2017

• Use January 20, 2025, in place of September 28, 2017

What this means in practice: If a business acquires and places property in service after January 19, 2025, the property generally qualifies for 100% bonus depreciation under the updated rules.

Bonus depreciation requirements for 2026: Understanding the four tests

Even with the OBBBA changes, property must still satisfy four primary requirements under §1.168(k)-2 to be considered "qualified property."

1. Qualified Property Type (MACRS, QIP, Software, and More)

Eligible property includes:

• MACRS property with a recovery period of 20 years or less
• Computer software
• Qualified Improvement Property (QIP)
• Qualified sound recording productions (added by the OBBBA, new for 2025/2026)

This expansion makes the property type test more favorable for entertainment, technology, and capital-intensive industries.

2. Acquisition test: Binding contract rules matter

To qualify for the 100% deduction, the property must be acquired after January 19, 2025, based on the written binding contract date. If a binding contract existed before January 20, 2025, the property generally falls under the old 40% bonus depreciation rate, not the new 100% rate.

This distinction is critical for taxpayers evaluating bonus depreciation contract date rules for 2026.

3. Original use or used property requirements

The TCJA rules for original use and used property remain in effect:

Original-use property: The first use must begin with the taxpayer.

Used property: Still qualifies if the taxpayer (or a predecessor) did not previously use it, and it was not acquired from a related party.

4. Placed-in-service test: Why the January 19, 2025, date matters

To qualify for the 100% rate, property must be acquired and placed in service after January 19, 2025.

This rule is especially relevant for taxpayers with fiscal year ends in mid-2025 or early 2026, where assets cross the legislative changeover date.

The 40% bonus depreciation election: A strategic tax planning option

While 100% bonus depreciation is now the default, the OBBBA and Notice 2026-11 preserve the important 40% bonus depreciation election (and 60% for long-production-period property).

Why elect less than 100%?

1. Managing Net Operating Losses (NOLs)

Electing 40% can help businesses avoid creating NOLs limited by the 80% taxable income cap, preserving deductions for potentially higher-tax-rate years.

2. Preventing wasted credits

Some nonrefundable tax credits are lost if taxable income drops to zero. Using the 40% rate gives businesses more precision in aligning deductions and credits.

The election applies to the first taxable year ending after January 19, 2025, and covers all qualified property placed in service during that year.

What 100% bonus depreciation means for 2026 capital planning

With Notice 2026-11 in place, businesses now have clarity as they model 2026 capital spending. Companies with heavy investment in equipment, real estate improvements, or cost segregation studies stand to benefit the most.

The return of full expensing—combined with the new flexibility provided by the 40% election—creates a more stable and planning-friendly environment than taxpayers have seen since the early TCJA years.

About BerryDunn

Our seasoned tax professionals partner with you to offer practical, accessible guidance and develop detailed strategies that support your unique needs. We excel at tax strategy and solutions, placing an emphasis on building long-term relationships. Our deep expertise spans a full range of tax concerns, tax services, and consulting to support individuals, businesses, and nonprofit organizations. Our tax consultants are specialists in their industry, working closely with colleagues across the firm to deliver integrated, comprehensive solutions. Learn more about our services and team.

Disclaimer

This article provides a general overview of tax law changes. For advice addressing your specific situation, please consult a qualified tax professional.