The Section 45Q tax credit is a U.S. federal incentive designed to promote the capture and sequestration of carbon oxides, such as carbon dioxide (CO₂). Established under Section 45Q of the Internal Revenue Code, this credit offers financial benefits to taxpayers who implement carbon capture and sequestration (CCS) technologies, aiming to reduce greenhouse gas emissions and encourage the development of carbon management projects.
The credit amount is calculated per metric ton of qualified carbon oxide that is captured and sequestered. The specific credit values and eligibility criteria have evolved over time, with significant enhancements introduced by legislative acts like the Bipartisan Budget Act of 2018 and the Inflation Reduction Act of 2022. These updates have increased the credit amounts and expanded the scope of eligible projects to further incentivize carbon capture initiatives.
For detailed information and official guidance on claiming the 45Q tax credit, you can refer to the Internal Revenue Service (IRS) resources:
- Form 8933: Used to claim the carbon oxide sequestration credit.
- Instructions for Form 8933: Provides detailed guidance on how to complete Form 8933.
Additionally, the U.S. Code outlines the specifics of the credit under 26 U.S.C. § 45Q.
These resources offer comprehensive information on eligibility requirements, credit calculations, and the necessary steps to claim the credit.
