Close
Close

IRS issues final carbon capture regs

RFP
Tax Hot Topics newsletter The IRS has issued final regulations (TD 9944) providing guidance on claiming carbon capture credits under Section 45Q. The final regulations retain the basic approach of proposed regulations issued in June but make several modifications.

The Bipartisan Budget Act significantly enhanced the credit for carbon captured using equipment placed into served on or after Feb. 9, 2018. It broadened the definition of carbon eligible and increased the maximum credit to $50 per metric ton for permanent sequestration and $35 per metric ton for Enhanced Oil Recovery purposes with no limit.

The IRS issued long-awaited proposed regulations in June addressing a broad array of questions related the credit. The final regulations follow the structure of the proposed regulations but revise and clarify several aspects of the credit in response to taxpayer comments.

The final regulations apply to tax years beginning on or after their publication in the Federal Register, but taxpayers may rely on them for tax years beginning on or after Jan. 1, 2018, so long as they do so entirely and consistently.

Contacts:
Dustin Stamper
Managing Director
Washington National Tax Office
T +1 202 861 4144

Tax professional standards statement
This content supports Grant Thornton LLP’s marketing of professional services and is not written tax advice directed at the particular facts and circumstances of any person. If you are interested in the topics presented herein, we encourage you to contact us or an independent tax professional to discuss their potential application to your particular situation. Nothing herein shall be construed as imposing a limitation on any person from disclosing the tax treatment or tax structure of any matter addressed herein. To the extent this content may be considered to contain written tax advice, any written advice contained in, forwarded with or attached to this content is not intended by Grant Thornton LLP to be used, and cannot be used, by any person for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.

The information contained herein is general in nature and is based on authorities that are subject to change. It is not, and should not be construed as, accounting, legal or tax advice provided by Grant Thornton LLP to the reader. This material may not be applicable to, or suitable for, the reader’s specific circumstances or needs and may require consideration of tax and nontax factors not described herein. Contact Grant Thornton LLP or other tax professionals prior to taking any action based upon this information. Changes in tax laws or other factors could affect, on a prospective or retroactive basis, the information contained herein; Grant Thornton LLP assumes no obligation to inform the reader of any such changes. All references to “Section,” “Sec.,” or “§” refer to the Internal Revenue Code of 1986, as amended.