The CIRCLE Act creates a new tax credit to encourage businesses to invest in recycling infrastructure and equipment. Here's what it does: If you own a business and invest in qualified recycling property—like machinery and equipment used to sort, process, and recycle materials—you can claim a tax credit worth 30% of what you spent on that property. For example, if you spend $100,000 on new recycling equipment, you could get a $30,000 tax credit.

The credit is designed to help the recycling industry modernize and expand. Currently, America recycles about 30% of its waste, but the Environmental Protection Agency has set a goal of 50% by 2030. Congress believes that by making recycling investments more affordable through tax credits, more businesses will upgrade their recycling operations and increase the supply of recycled materials available for domestic use. There's also a bonus: if your recycling equipment uses domestically-made parts and materials, you get an extra 10% credit on top of the base 30%.

However, the credit isn't permanent. It starts at full strength in 2026 and gradually phases out over time, reaching zero by 2037. This means businesses have about a decade to take advantage of the incentive. The credit applies to new recycling facilities that a business builds or to used equipment that the business is the first to put into service. The law specifically focuses on true recycling—not burning waste for energy or using it as landfill cover—to ensure the credit supports genuine circular economy practices.