Railroad Track Maintenance Tax Credit
The Railroad Track Maintenance Tax Credit, known as the 45G credit, is a federal tax credit for keeping track and related rail infrastructure in good shape. It helps short line and regional railroads in the United States by covering 50% of qualified track maintenance costs and certain other railroad projects, up to $3,500 per mile of track per year (or 50% of costs if that amount is lower).
Who can use it: Class II and III railroads, shippers that use those railroads, and companies that maintain or supply materials for qualified railroads. The credit can be transferred between eligible taxpayers and passed through to owners or partners on their tax forms.
History at a glance: The credit was created by the American Jobs Creation Act of 2004 and took effect in 2005. It originally expired in 2009 but was extended many times and eventually made permanent in 2021. In 2025, a bill was introduced to modernize the credit by raising the per-mile cap, indexing it to inflation, and expanding the track that qualifies.
Why it matters: Private investment in rail upkeep has topped $8 billion, financed in part by this credit. Data from the Federal Railroad Administration show derailments on short line railroads have fallen about 50% since the credit began, linking better infrastructure to safer operations.
How to claim: Taxpayers use IRS Form 8900 to claim the credit, up to $3,500 per mile per year or 50% of eligible maintenance costs, whichever is less. Form 8900 also handles transferring credits between eligible parties. Eligible recipients include short line railroads, users of the railroad property, and suppliers of goods and services to these railroads. Pass-through benefits can appear on partners’ or shareholders’ tax forms.
This page was last edited on 2 February 2026, at 22:56 (CET).