New Egg Hatchery Tax Credit Offers 50% Break on Pre-Hatch Sexing Tech, But Expires by 2029

The newly introduced Efficiency Gains through Grading Standards And Viable Enhancement Act of 2025—or the EGG SAVE Act—is essentially a temporary, high-value tax break aimed squarely at the commercial egg production industry. Starting in 2026, this bill creates the “Layer Operation Efficiency Equipment Credit” to help U.S. hatcheries buy high-tech gear designed to determine the sex of bird embryos before they hatch.

This isn't small change. If a hatchery puts this specialized equipment into service in 2026, they can claim a tax credit equal to 50 percent of the cost of the equipment, installation, and facility modifications. This credit drops to 40 percent in 2027 and then 30 percent in 2028. The clock is ticking, though: the program sunsets, and no equipment placed in service after December 31, 2028, will qualify.

The High-Tech Chick Check

What kind of equipment qualifies for this massive tax subsidy? It must be sex identification technology—optical or non-optical—installed at a U.S. commercial egg hatchery. Crucially, the bill mandates that this equipment must achieve an accuracy rate of at least 95 percent in determining the embryo’s sex. This high bar ensures that the government is subsidizing only the most effective, modern technology available.

Why the focus on pre-hatch sexing? This technology addresses a major efficiency and welfare issue in the egg industry: male chicks are not used for egg production and are typically culled shortly after hatching. By identifying and removing male embryos before they hatch, hatcheries can save on incubation costs and avoid the culling process, which has become a significant public and ethical concern. For the industry, this credit acts as a major incentive to adopt a costly technology that improves efficiency and addresses consumer concerns.

The Catch in the Tax Code

While a 50% tax credit sounds like a straight win, there’s a key detail in the tax code mechanics that hatcheries need to watch. If a business claims this credit, they must reduce the tax basis of the equipment by the exact amount of the credit claimed. The tax basis is the value used to calculate depreciation deductions over the equipment’s useful life. In plain English, while you get a huge chunk of cash back immediately via the credit, you lose out on some of the long-term tax write-offs you would normally get from depreciation. It’s a trade-off between immediate cash flow and future deductions.

Another point of note is the grant of authority to the Treasury Secretary, who can add “other requirements” for qualifying equipment. While this allows flexibility to ensure the technology remains state-of-the-art, it also introduces a slight element of uncertainty for businesses planning large capital expenditures, as the rules could potentially shift.

Who Benefits and Who Pays?

This bill is a clear win for large U.S. commercial egg hatcheries that can afford the initial capital outlay for this specialized, high-accuracy equipment. It offsets the cost of a major technological upgrade, potentially accelerating the adoption of more humane and efficient practices across the industry. It’s also great news for the manufacturers of this specialized optical and non-optical sexing technology.

However, the cost of this program—the half-off sale on high-tech equipment—is borne by the general taxpayer, as the credit represents a tax expenditure (a reduction in federal revenue). Furthermore, smaller operations or those with tighter cash reserves might struggle to afford the initial investment required to claim the credit, potentially putting them at a competitive disadvantage against larger players who can more easily finance the purchase of this expensive, high-accuracy gear.