Title 26 — Internal Revenue Code

Part IV · Chapter 1 — Normal Taxes and Surtaxes

§ 45Q. Credit for carbon oxide sequestration

Statutory text

General rule

For purposes of section 38, the carbon oxide sequestration credit for any taxable year is an amount equal to the sum of—

$20 per metric ton of qualified carbon oxide which is—

captured by the taxpayer using carbon capture equipment which is originally placed in service at a qualified facility before the date of the enactment of the Bipartisan Budget Act of 2018, and

disposed of by the taxpayer in secure geological storage and not used by the taxpayer as described in paragraph (2)(B),

$10 per metric ton of qualified carbon oxide which is—

captured by the taxpayer using carbon capture equipment which is originally placed in service at a qualified facility before the date of the enactment of the Bipartisan Budget Act of 2018, and

used by the taxpayer as a tertiary injectant in a qualified enhanced oil or natural gas recovery project and disposed of by the taxpayer in secure geological storage, or

utilized by the taxpayer in a manner described in subsection (f)(5), and

the applicable dollar amount (as determined under subsection (b)(1)) per metric ton of qualified carbon oxide which is—

captured by the taxpayer using carbon capture equipment which is originally placed in service at a qualified facility on or after the date of the enactment of the Bipartisan Budget Act of 2018, during the 12-year period beginning on the date the equipment was originally placed in service, and

disposed of by the taxpayer in secure geological storage and not used by the taxpayer as described in clause (ii) or (iii),

used by the taxpayer as a tertiary injectant in a qualified enhanced oil or natural gas recovery project and disposed of by the taxpayer in secure geological storage, or

utilized by the taxpayer in a manner described in subsection (f)(5).

Applicable dollar amount; additional equipment; election

Applicable dollar amount

In general

Except as provided in subparagraph (B) or (C), the applicable dollar amount shall be an amount equal to—

for any taxable year beginning in a calendar year after 2024 and before 2027, $17, and

for any taxable year beginning in a calendar year after 2026, an amount equal to the product of $17 and the inflation adjustment factor for such calendar year determined under section 43(b)(3)(B) for such calendar year, determined by substituting “2025” for “1990”.

Special rule for direct air capture facilities

In the case of any qualified facility described in subsection (d)(2)(A) which is placed in service after December 31, 2022, the applicable dollar amount shall be an amount equal to the applicable dollar amount otherwise determined with respect to such qualified facility under subparagraph (A), except that such subparagraph shall be applied by substituting “$36” for “$17” each place it appears.

Applicable dollar amount for additional carbon capture equipment

In the case of any qualified facility which is placed in service before January 1, 2023, if any additional carbon capture equipment is installed at such facility and such equipment is placed in service after December 31, 2022, the applicable dollar amount shall be an amount equal to the applicable dollar amount otherwise determined under this paragraph, except that subparagraph (B) shall be applied—

by substituting “before January 1, 2023” for “after December 31, 2022”, and

by substituting “the additional carbon capture equipment installed at such qualified facility” for “such qualified facility”.

Rounding

The applicable dollar amount determined under subparagraph (A), (B), or (C) shall be rounded to the nearest cent.

Installation of additional carbon capture equipment on existing qualified facility

In the case of a qualified facility placed in service before the date of the enactment of the Bipartisan Budget Act of 2018, for which additional carbon capture equipment is placed in service on or after the date of the enactment of such Act, the amount of qualified carbon oxide which is captured by the taxpayer shall be equal to—

for purposes of paragraphs (1)(A) and (2)(A) of subsection (a), the lesser of—

the total amount of qualified carbon oxide captured at such facility for the taxable year, or

the total amount of the carbon dioxide capture capacity of the carbon capture equipment in service at such facility on the day before the date of the enactment of the Bipartisan Budget Act of 2018, and

for purposes of paragraph (3)(A) of such subsection, an amount (not less than zero) equal to the excess of—

the amount described in clause (i) of subparagraph (A), over

the amount described in clause (ii) of such subparagraph.

Election

For purposes of determining the carbon oxide sequestration credit under this section, a taxpayer may elect to have the dollar amounts applicable under paragraph (1) or (2) of subsection (a) apply in lieu of the dollar amount applicable under paragraph (3) of such subsection for each metric ton of qualified carbon oxide which is captured by the taxpayer using carbon capture equipment which is originally placed in service at a qualified facility on or after the date of the enactment of the Bipartisan Budget Act of 2018.

Qualified carbon oxide

For purposes of this section—

In general

The term “qualified carbon oxide” means—

any carbon dioxide which—

is captured from an industrial source by carbon capture equipment which is originally placed in service before the date of the enactment of the Bipartisan Budget Act of 2018,

would otherwise be released into the atmosphere as industrial emission of greenhouse gas or lead to such release, and

is measured at the source of capture and verified at the point of disposal, injection, or utilization,

any carbon dioxide or other carbon oxide which—

is captured from an industrial source by carbon capture equipment which is originally placed in service on or after the date of the enactment of the Bipartisan Budget Act of 2018,

would otherwise be released into the atmosphere as industrial emission of greenhouse gas or lead to such release, and

is measured at the source of capture and verified at the point of disposal, injection, or utilization, or

in the case of a direct air capture facility, any carbon dioxide which—

is captured directly from the ambient air, and

is measured at the source of capture and verified at the point of disposal, injection, or utilization.

Recycled carbon oxide

The term “qualified carbon oxide” includes the initial deposit of captured carbon oxide used as a tertiary injectant. Such term does not include carbon oxide that is recaptured, recycled, and re-injected as part of the enhanced oil and natural gas recovery process.

Qualified facility

For purposes of this section, the term “qualified facility” means any industrial facility or direct air capture facility—

the construction of which begins before January 1, 2033, and either—

construction of carbon capture equipment begins before such date, or

the original planning and design for such facility includes installation of carbon capture equipment, and

which—

in the case of a direct air capture facility, captures not less than 1,000 metric tons of qualified carbon oxide during the taxable year,

in the case of an electricity generating facility—

captures not less than 18,750 metric tons of qualified carbon oxide during the taxable year, and

with respect to any carbon capture equipment for the applicable electric generating unit at such facility, has a capture design capacity of not less than 75 percent of the baseline carbon oxide production of such unit, or

in the case of any other facility, captures not less than 12,500 metric tons of qualified carbon oxide during the taxable year.

Definitions

For purposes of this section—

Applicable electric generating unit

The term “applicable electric generating unit” means the principal electric generating unit for which the carbon capture equipment is originally planned and designed.

Baseline carbon oxide production

In general

The term “baseline carbon oxide production” means either of the following:

In the case of an applicable electric generating unit which was originally placed in service more than 1 year prior to the date on which construction of the carbon capture equipment begins, the average annual carbon oxide production, by mass, from such unit during—

in the case of an applicable electric generating unit which was originally placed in service more than 1 year prior to the date on which construction of the carbon capture equipment begins and on or after the date which is 3 years prior to the date on which construction of such equipment begins, the period beginning on the date such unit was placed in service and ending on the date on which construction of such equipment began, and

in the case of an applicable electric generating unit which was originally placed in service more than 3 years prior to the date on which construction of the carbon capture equipment begins, the 3 years with the highest annual carbon oxide production during the 12-year period preceding the date on which construction of such equipment began.

In the case of an applicable electric generating unit which—

as of the date on which construction of the carbon capture equipment begins, is not yet placed in service, or

was placed in service during the 1-year period prior to the date on which construction of the carbon capture equipment begins,

the designed annual carbon oxide production, by mass, as determined based on an assumed capacity factor of 60 percent.

Capacity factor

The term “capacity factor” means the ratio (expressed as a percentage) of the actual electric output from the applicable electric generating unit to the potential electric output from such unit.

Direct air capture facility

In general

Subject to subparagraph (B), the term “direct air capture facility” means any facility which uses carbon capture equipment to capture carbon dioxide directly from the ambient air.

Exception

The term “direct air capture facility” shall not include any facility which captures carbon dioxide—

which is deliberately released from naturally occurring subsurface springs, or

using natural photosynthesis.

Qualified enhanced oil or natural gas recovery project

The term “qualified enhanced oil or natural gas recovery project” has the meaning given the term “qualified enhanced oil recovery project” by section 43(c)(2), by substituting “crude oil or natural gas” for “crude oil” in subparagraph (A)(i) thereof.

Tertiary injectant

The term “tertiary injectant” has the same meaning as when used within section 193(b)(1).

Special rules

Only qualified carbon oxide captured and disposed of or used within the united states taken into account

The credit under this section shall apply only with respect to qualified carbon oxide the capture and disposal, use, or utilization of which is within—

the United States (within the meaning of section 638(1)), or

a possession of the United States (within the meaning of section 638(2)).

Secure geological storage

The Secretary, in consultation with the Administrator of the Environmental Protection Agency, the Secretary of Energy, and the Secretary of the Interior, shall establish regulations for determining adequate security measures for the geological storage of qualified carbon oxide under subsection (a) such that the qualified carbon oxide does not escape into the atmosphere. Such term shall include storage at deep saline formations, oil and gas reservoirs, and unminable coal seams under such conditions as the Secretary may determine under such regulations.

Credit attributable to taxpayer

In general

Except as provided in subparagraph (B) or in any regulations prescribed by the Secretary, any credit under this section shall be attributable to—

in the case of qualified carbon oxide captured using carbon capture equipment which is originally placed in service at a qualified facility before the date of the enactment of the Bipartisan Budget Act of 2018, the person that captures and physically or contractually ensures the disposal, utilization, or use as a tertiary injectant of such qualified carbon oxide, and

in the case of qualified carbon oxide captured using carbon capture equipment which is originally placed in service at a qualified facility on or after the date of the enactment of the Bipartisan Budget Act of 2018, the person that owns the carbon capture equipment and physically or contractually ensures the capture and disposal, utilization, or use as a tertiary injectant of such qualified carbon oxide.

Election

If the person described in subparagraph (A) makes an election under this subparagraph in such time and manner as the Secretary may prescribe by regulations, the credit under this section—

shall be allowable to the person that disposes of the qualified carbon oxide, utilizes the qualified carbon oxide, or uses the qualified carbon oxide as a tertiary injectant, and

shall not be allowable to the person described in subparagraph (A).

Recapture

The Secretary shall, by regulations, provide for recapturing the benefit of any credit allowable under subsection (a) with respect to any qualified carbon oxide which ceases to be captured, disposed of, or used as a tertiary injectant in a manner consistent with the requirements of this section.

Utilization of qualified carbon oxide

In general

For purposes of this section, utilization of qualified carbon oxide means—

the fixation of such qualified carbon oxide through photosynthesis or chemosynthesis, such as through the growing of algae or bacteria,

the chemical conversion of such qualified carbon oxide to a material or chemical compound in which such qualified carbon oxide is securely stored, or

the use of such qualified carbon oxide for any other purpose for which a commercial market exists (with the exception of use as a tertiary injectant in a qualified enhanced oil or natural gas recovery project), as determined by the Secretary.

Measurement

In general

For purposes of determining the amount of qualified carbon oxide utilized by the taxpayer under paragraph (2)(B)(ii) or (3)(B)(iii) of subsection (a), such amount shall be equal to the metric tons of qualified carbon oxide which the taxpayer demonstrates, based upon an analysis of lifecycle greenhouse gas emissions and subject to such requirements as the Secretary, in consultation with the Secretary of Energy and the Administrator of the Environmental Protection Agency, determines appropriate, were—

captured and permanently isolated from the atmosphere, or

displaced from being emitted into the atmosphere,

through use of a process described in subparagraph (A).

Lifecycle greenhouse gas emissions

For purposes of clause (i), the term “lifecycle greenhouse gas emissions” has the same meaning given such term under subparagraph (H) of section 211(o)(1) of the Clean Air Act (42 U.S.C. 7545(o)(1)), as in effect on the date of the enactment of the Bipartisan Budget Act of 2018, except that “product” shall be substituted for “fuel” each place it appears in such subparagraph.

Election for applicable facilities

In general

For purposes of this section, in the case of an applicable facility, for any taxable year in which such facility captures not less than 500,000 metric tons of qualified carbon oxide during the taxable year, the person described in paragraph (3)(A)(ii) may elect to have such facility, and any carbon capture equipment placed in service at such facility, deemed as having been placed in service on the date of the enactment of the Bipartisan Budget Act of 2018.

Applicable facility

For purposes of this paragraph, the term “applicable facility” means a qualified facility—

which was placed in service before the date of the enactment of the Bipartisan Budget Act of 2018, and

for which no taxpayer claimed a credit under this section in regards to such facility for any taxable year ending before the date of the enactment of such Act.

Inflation adjustment

In the case of any taxable year beginning in a calendar year after 2009, there shall be substituted for each dollar amount contained in paragraphs (1) and (2) of subsection (a) an amount equal to the product of—

such dollar amount, multiplied by

the inflation adjustment factor for such calendar year determined under section 43(b)(3)(B) for such calendar year, determined by substituting “2008” for “1990”.

Credit reduced for tax-exempt bonds

Rules similar to the rule under section 45(b)(3) shall apply for purposes of this section.

Election

For purposes of subsection (a)(3), a person described in paragraph (3)(A)(ii) may elect, at such time and in such manner as the Secretary may prescribe, to have the 12–year period begin on the first day of the first taxable year in which a credit under this section is claimed with respect to carbon capture equipment which is originally placed in service at a qualified facility on or after the date of the enactment of the Bipartisan Budget Act of 2018 (after application of paragraph (6), where applicable) if—

no taxpayer claimed a credit under this section with respect to such carbon capture equipment for any prior taxable year,

the qualified facility at which such carbon capture equipment is placed in service is located in an area affected by a federally-declared disaster (as defined by section 165(i)(5)(A)) after the carbon capture equipment is originally placed in service, and

such federally-declared disaster results in a cessation of the operation of the qualified facility or the carbon capture equipment after such equipment is originally placed in service.

Restrictions relating to prohibited foreign entities

No credit shall be determined under subsection (a) for any taxable year beginning after the date of enactment of this paragraph if the taxpayer is—

a specified foreign entity (as defined in section 7701(a)(51)(B)), or

a foreign-influenced entity (as defined in section 7701(a)(51)(D), determined without regard to clause (i)(II) thereof).

Application of section for certain carbon capture equipment

In the case of any carbon capture equipment placed in service before the date of the enactment of the Bipartisan Budget Act of 2018, the credit under this section shall apply with respect to qualified carbon oxide captured using such equipment before the earlier of January 1, 2023, and the end of the calendar year in which the Secretary, in consultation with the Administrator of the Environmental Protection Agency, certifies that, during the period beginning after October 3, 2008, a total of 75,000,000 metric tons of qualified carbon oxide have been taken into account in accordance with—

subsection (a) of this section, as in effect on the day before the date of the enactment of the Bipartisan Budget Act of 2018, and

paragraphs (1) and (2) of subsection (a) of this section.

Increased credit amount for qualified facilities and carbon capture equipment

In general

In the case of any qualified facility or any carbon capture equipment which satisfy the requirements of paragraph (2), the amount of the credit determined under subsection (a) shall be equal to such amount (determined without regard to this sentence) multiplied by 5.

Requirements

The requirements described in this paragraph are that—

with respect to any qualified facility the construction of which begins on or after the date that is 60 days after the Secretary publishes guidance with respect to the requirements of paragraphs (3)(A) and (4), as well as any carbon capture equipment placed in service at such facility—

subject to subparagraph (B) of paragraph (3), the taxpayer satisfies the requirements under subparagraph (A) of such paragraph with respect to such facility and equipment, and

the taxpayer satisfies the requirements under paragraph (4) with respect to the construction of such facility and equipment,

with respect to any carbon capture equipment the construction of which begins on or after the date that is 60 days after the Secretary publishes guidance with respect to the requirements of paragraphs (3)(A) and (4), and which is installed at a qualified facility the construction of which began prior to such date—

subject to subparagraph (B) of paragraph (3), the taxpayer satisfies the requirements under subparagraph (A) of such paragraph with respect to such equipment, and

the taxpayer satisfies the requirements under paragraph (4) with respect to the construction of such equipment, or

the construction of carbon capture equipment begins prior to the date that is 60 days after the Secretary publishes guidance with respect to the requirements of paragraphs (3)(A) and (4), and such equipment is installed at a qualified facility the construction of which begins prior to such date.

Prevailing wage requirements

In general

The requirements described in this subparagraph with respect to any qualified facility and any carbon capture equipment placed in service at such facility are that the taxpayer shall ensure that any laborers and mechanics employed by the taxpayer or any contractor or subcontractor in—

the construction of such facility or equipment, and

with respect to any taxable year, for any portion of such taxable year which is within the period described in subsection (a)(3)(A), the alteration or repair of such facility or such equipment,

shall be paid wages at rates not less than the prevailing rates for construction, alteration, or repair of a similar character in the locality in which such facility and equipment are located as most recently determined by the Secretary of Labor, in accordance with subchapter IV of chapter 31 of title 40, United States Code. For purposes of determining an increased credit amount under paragraph (1) for a taxable year, the requirement under clause (ii) of this subparagraph is applied to such taxable year in which the alteration or repair of qualified facility occurs.

Correction and penalty related to failure to satisfy wage requirements

Rules similar to the rules of section 45(b)(7)(B) shall apply.

Apprenticeship requirements

Rules similar to the rules of section 45(b)(8) shall apply.

Regulations and guidance

The Secretary shall issue such regulations or other guidance as the Secretary determines necessary to carry out the purposes of this subsection, including regulations or other guidance which provides for requirements for recordkeeping or information reporting for purposes of administering the requirements of this subsection.

Regulations

The Secretary may prescribe such regulations and other guidance as may be necessary or appropriate to carry out this section, including regulations or other guidance to—

ensure proper allocation under subsection (a) for qualified carbon oxide captured by a taxpayer during the taxable year ending after the date of the enactment of the Bipartisan Budget Act of 2018,

determine whether a facility satisfies the requirements under subsection (d)(1) during such taxable year, and

for purposes of subsection (d)(2)(B)(ii), adjust the baseline carbon oxide production with respect to any applicable electric generating unit at any electricity generating facility if, after the date on which the carbon capture equipment is placed in service, modifications which are chargeable to capital account are made to such unit which result in a significant increase or decrease in carbon oxide production.

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

2008
Emergency Economic Stabilization Act of 2008
Pub. L. 110–343 div. B title I § 115(a) · 122 Stat. 3765
Enacted · 26 U.S.C. § 45Q
Added Pub. L. 110–343, div. B, title I, § 115(a), Oct. 3, 2008, 122 Stat. 3829
Source evidence
Code source credit
Added Pub. L. 110–343, div. B, title I, § 115(a), Oct. 3, 2008, 122 Stat. 3829
Enacted provision · exact public law section
(a) Authority.— The authority of the Secretary to purchase troubled assets under this Act shall be limited as follows: (1) Effective upon the date of enactment of this Act, such authority shall be limited to $250,000,000,000 outstanding at any one time. (2) If at any time, the President submits to the Congress a written certification that the Secretary needs to exercise the authority under this paragraph, effective upon such submission, such authority shall be limited to $350,000,000,000 outstanding at any one time. (3) If, at any time after the certification in paragraph (2) has been made, the President transmits to the Congress a written report detailing the plan of the Secretary to exercise the authority under this paragraph, unless there is enacted, within 15 calendar days of such transmission, a joint resolution described in subsection (c), effective upon the expiration of such 15-day period, such authority shall be limited to $700,000,000,000 outstanding at any one time.
2009
American Recovery and Reinvestment Act of 2009
Pub. L. 111–5 § 1131(b)(2) · 123 Stat. 115
Inserted · 26 U.S.C. § 45Q(a)(1)(B)
Pub. L. 111–5, § 1131(b)(2), inserted “and not used by the taxpayer as described in paragraph (2)(B)” after “storage”
Source evidence
Code amendment note
Subsec. (a)(1)(B). Pub. L. 111–5, § 1131(b)(2), inserted “and not used by the taxpayer as described in paragraph (2)(B)” after “storage”.
Enacted provision · exact public law section
(2) Section 45Q(a)(1)(B) is amended by inserting “and not used by the taxpayer as described in paragraph (2)(B)” after “storage”.
2009
American Recovery and Reinvestment Act of 2009
Pub. L. 111–5 § 1131(a) · 123 Stat. 115
Added · 26 U.S.C. § 45Q(a)(2)(C)
Pub. L. 111–5, § 1131(a), added subpar. (C)
Source evidence
Code amendment note
Subsec. (a)(2)(C). Pub. L. 111–5, § 1131(a), added subpar. (C).
Enacted provision · exact public law section
(a) In General.— Section 45Q(a)(2) is amended by striking “and” at the end of subparagraph (A), by striking the period at the end of subparagraph (B) and inserting “, and”, and by adding at the end the following new subparagraph: “(C) disposed of by the taxpayer in secure geological storage.” .
2009
American Recovery and Reinvestment Act of 2009
Pub. L. 111–5 § 1131(b)(1) · 123 Stat. 115
1. Inserted · 26 U.S.C. § 45Q(d)(2)
  Pub. L. 111–5, § 1131(b)(1), inserted “the Secretary of Energy, and the Secretary of the Interior,” after “Environmental Protection Agency”
2. Substituted · 26 U.S.C. § 45Q(d)(2)
  Pub. L. 111–5, § 1131(b)(1), substituted “paragraph (1)(B) or (2)(C) of subsection (a)” for “subsection (a)(1)(B)”
3. Substituted · 26 U.S.C. § 45Q(d)(2)
  Pub. L. 111–5, § 1131(b)(1), substituted “, oil and gas reservoirs, and unminable coal seams” for “and unminable coal seems”
Source evidence
Code amendment note
Subsec. (d)(2). Pub. L. 111–5, § 1131(b)(1), inserted “the Secretary of Energy, and the Secretary of the Interior,” after “Environmental Protection Agency” and substituted “paragraph (1)(B) or (2)(C) of subsection (a)” for “subsection (a)(1)(B)” and “, oil and gas reservoirs, and unminable coal seams” for “and unminable coal seems”.
Enacted provision · exact public law section
(1) Section 45Q(d)(2) is amended— (A) by striking “subsection (a)(1)(B)” and inserting “paragraph (1)(B) or (2)(C) of subsection (a)”, (B) by striking “and unminable coal seems” and inserting “, oil and gas reservoirs, and unminable coal seams”, and (C) by inserting “the Secretary of Energy, and the Secretary of the Interior,” after “Environmental Protection Agency”.
2009
American Recovery and Reinvestment Act of 2009
Pub. L. 111–5 § 1131(b)(3) · 123 Stat. 115
Substituted · 26 U.S.C. § 45Q(e)
Pub. L. 111–5, § 1131(b)(3), substituted “taken into account in accordance with subsection (a)” for “captured and disposed of or used as a tertiary injectant”
Source evidence
Code amendment note
Subsec. (e). Pub. L. 111–5, § 1131(b)(3), substituted “taken into account in accordance with subsection (a)” for “captured and disposed of or used as a tertiary injectant”.
Enacted provision · exact public law section
(3) Section 45Q(e) is amended by striking “captured and disposed of or used as a tertiary injectant” and inserting “taken into account in accordance with subsection (a)”.
2014
Tax Technical Corrections Act of 2014
Pub. L. 113–295 div. A title II § 209(j)(1) · 128 Stat. 4010
Substituted · 26 U.S.C. § 45Q(d)(2)
Pub. L. 113–295 substituted “Administrator of the Environmental Protection Agency, the Secretary of Energy, and the Secretary of the Interior, shall establish” for “Administrator of the Environmental Protection Agency the Secretary of Energy, and the Secretary of the Interior,, shall establish”
Source evidence
Code amendment note
Subsec. (d)(2). Pub. L. 113–295 substituted “Administrator of the Environmental Protection Agency, the Secretary of Energy, and the Secretary of the Interior, shall establish” for “Administrator of the Environmental Protection Agency the Secretary of Energy, and the Secretary of the Interior,, shall establish”.
Enacted provision · exact public law section
(1) Amendment relating to section 1131.— Paragraph (2) of section 45Q(d) is amended by striking “Administrator of the Environmental Protection Agency” and all that follows through “shall establish” and inserting “Administrator of the Environmental Protection Agency, the Secretary of Energy, and the Secretary of the Interior, shall establish”.
2018
Bipartisan Budget Act of 2018
Pub. L. 115–123 div. D title II § 41119(a) · 132 Stat. 64
Amended · 26 U.S.C. § 45Q
Pub. L. 115–123 amended section generally. Prior to amendment, section related to credit for carbon dioxide sequestration
Source evidence
Code amendment note
Pub. L. 115–123 amended section generally. Prior to amendment, section related to credit for carbon dioxide sequestration.
Enacted provision · exact public law section
(a) In General.— Section 45Q is amended to read as follows: “SEC. 45Q. CREDIT FOR CARBON OXIDE SEQUESTRATION. “(a) General Rule.— For purposes of section 38, the carbon oxide sequestration credit for any taxable year is an amount equal to the sum of— “(1) $20 per metric ton of qualified carbon oxide which is— “(A) captured by the taxpayer using carbon capture equipment which is originally placed in service at a qualified facility before the date of the enactment of the Bipartisan Budget Act of 2018, and “(B) disposed of by the taxpayer in secure geological storage and not used by the taxpayer as described in paragraph (2)(B), “(2) $10 per metric ton of qualified carbon oxide which is— “(A) captured by the taxpayer using carbon capture equipment which is originally placed in service at a qualified facility before the date of the enactment of the Bipartisan Budget Act of 2018, and “(B) (i) used by the taxpayer as a tertiary injectant in a qualified enhanced oil or natural gas recovery project and disposed of by the taxpayer in secure geological storage, or “(ii) utilized by the taxpayer in a manner described in subsection (f)(5), “(3) the applicable dollar amount (as determined under subsection (b)(1)) per metric ton of qualified carbon oxide which is— “(A) captured by the taxpayer using carbon capture equipment which is originally placed in service at a qualified facility on or after the date of the enactment of the Bipartisan Budget Act of 2018, during the 12-year period beginning on the date the equipment was originally placed in service, and “(B) disposed of by the taxpayer in secure geological storage and not used by the taxpayer as described in paragraph (4)(B), and “(4) the applicable dollar amount (as determined under subsection (b)(1)) per metric ton of qualified carbon oxide which is— “(A) captured by the taxpayer using carbon capture equipment which is originally placed in service at a qualified facility on or after the date of the enactment of the Bipartisan Budget Act of 2018, during the 12-year period beginning on the date the equipment was originally placed in service, and “(B) (i) used by the taxpayer as a tertiary injectant in a qualified enhanced oil or natural gas recovery project and disposed of by the taxpayer in secure geological storage, or “(ii) utilized by the taxpayer in a manner described in subsection (f)(5). “(b) Applicable Dollar Amount; Additional Equipment; Election.— “(1) Applicable dollar amount.— “(A) In general.— The applicable dollar amount shall be an amount equal to— “(i) for any taxable year beginning in a calendar year after 2016 and before 2027— “(I) for purposes of paragraph (3) of subsection (a), the dollar amount established by linear interpolation between $22.66 and $50 for each calendar year during such period, and “(II) for purposes of paragraph (4) of such subsection, the dollar amount established by linear interpolation between $12.83 and $35 for each calendar year during such period, and “(ii) for any taxable year beginning in a calendar year after 2026— “(I) for purposes of paragraph (3) of subsection (a), an amount equal to the product of $50 and the inflation adjustment factor for such calendar year determined under section 43(b)(3)(B) for such calendar year, determined by substituting ‘2025’ for ‘1990’, and “(II) for purposes of paragraph (4) of such subsection, an amount equal to the product of $35 and the inflation adjustment factor for such calendar year determined under section 43(b)(3)(B) for such calendar year, determined by substituting ‘2025’ for ‘1990’. “(B) Rounding.— The applicable dollar amount determined under subparagraph (A) shall be rounded to the nearest cent. “(2) Installation of additional carbon capture equipment on existing qualified facility.— In the case of a qualified facility placed in service before the date of the enactment of the Bipartisan Budget Act of 2018, for which additional carbon capture equipment is placed in service on or after the date of the enactment of such Act, the amount of qualified carbon oxide which is captured by the taxpayer shall be equal to— “(A) for purposes of paragraphs (1)(A) and (2)(A) of subsection (a), the lesser of— “(i) the total amount of qualified carbon oxide captured at such facility for the taxable year, or “(ii) the total amount of the carbon dioxide capture capacity of the carbon capture equipment in service at such facility on the day before the date of the enactment of the Bipartisan Budget Act of 2018, and “(B) for purposes of paragraphs (3)(A) and (4)(A) of such subsection, an amount (not less than zero) equal to the excess of— “(i) the amount described in clause (i) of subparagraph (A), over “(ii) the amount described in clause (ii) of such subparagraph. “(3) Election.— For purposes of determining the carbon oxide sequestration credit under this section, a taxpayer may elect to have the dollar amounts applicable under paragraph (1) or (2) of subsection (a) apply in lieu of the dollar amounts applicable under paragraph (3) or (4) of such subsection for each metric ton of qualified carbon oxide which is captured by the taxpayer using carbon capture equipment which is originally placed in service at a qualified facility on or after the date of the enactment of the Bipartisan Budget Act of 2018. “(c) Qualified Carbon Oxide.— For purposes of this section— “(1) In general.— The term ‘qualified carbon oxide’ means— “(A) any carbon dioxide which— “(i) is captured from an industrial source by carbon capture equipment which is originally placed in service before the date of the enactment of the Bipartisan Budget Act of 2018, “(ii) would otherwise be released into the atmosphere as industrial emission of greenhouse gas or lead to such release, and “(iii) is measured at the source of capture and verified at the point of disposal, injection, or utilization, “(B) any carbon dioxide or other carbon oxide which— “(i) is captured from an industrial source by carbon capture equipment which is originally placed in service on or after the date of the enactment of the Bipartisan Budget Act of 2018, “(ii) would otherwise be released into the atmosphere as industrial emission of greenhouse gas or lead to such release, and “(iii) is measured at the source of capture and verified at the point of disposal, injection, or utilization, or “(C) in the case of a direct air capture facility, any carbon dioxide which— “(i) is captured directly from the ambient air, and “(ii) is measured at the source of capture and verified at the point of disposal, injection, or utilization. “(2) Recycled carbon oxide.— The term ‘qualified carbon oxide’ includes the initial deposit of captured carbon oxide used as a tertiary injectant. Such term does not include carbon oxide that is recaptured, recycled, and re-injected as part of the enhanced oil and natural gas recovery process. “(d) Qualified Facility.— For purposes of this section, the term ‘qualified facility’ means any industrial facility or direct air capture facility— “(1) the construction of which begins before January 1, 2024, and— “(A) construction of carbon capture equipment begins before such date, or “(B) the original planning and design for such facility includes installation of carbon capture equipment, and “(2) which captures— “(A) in the case of a facility which emits not more than 500,000 metric tons of carbon oxide into the atmosphere during the taxable year, not less than 25,000 metric tons of qualified carbon oxide during the taxable year which is utilized in a manner described in subsection (f)(5), “(B) in the case of an electricity generating facility which is not described in subparagraph (A), not less than 500,000 metric tons of qualified carbon oxide during the taxable year, or “(C) in the case of a direct air capture facility or any facility not described in subparagraph (A) or (B), not less than 100,000 metric tons of qualified carbon oxide during the taxable year. “(e) Definitions.— For purposes of this section— “(1) Direct air capture facility.— “(A) In general.— Subject to subparagraph (B), the term ‘direct air capture facility’ means any facility which uses carbon capture equipment to capture carbon dioxide directly from the ambient air. “(B) Exception.— The term ‘direct air capture facility’ shall not include any facility which captures carbon dioxide— “(i) which is deliberately released from naturally occurring subsurface springs, or “(ii) using natural photosynthesis. “(2) Qualified enhanced oil or natural gas recovery project.— The term ‘qualified enhanced oil or natural gas recovery project’ has the meaning given the term ‘qualified enhanced oil recovery project’ by section 43(c)(2), by substituting ‘crude oil or natural gas’ for ‘crude oil’ in subparagraph (A)(i) thereof. “(3) Tertiary injectant.— The term ‘tertiary injectant’ has the same meaning as when used within section 193(b)(1). “(f) Special Rules.— “(1) Only qualified carbon oxide captured and disposed of or used within the united states taken into account.— Applicability. The credit under this section shall apply only with respect to qualified carbon oxide the capture and disposal, use, or utilization of which is within— “(A) the United States (within the meaning of section 638(1)), or “(B) a possession of the United States (within the meaning of section 638(2)). “(2) Secure geological storage.— The Secretary, in consultation with the Administrator of the Environmental Protection Agency, the Secretary of Energy, and the Secretary of the Interior, shall establish regulations for determining adequate security measures for the geological storage of qualified carbon oxide under subsection (a) such that the qualified carbon oxide does not escape into the atmosphere. Such term shall include storage at deep saline formations, oil and gas reservoirs, and unminable coal seams under such conditions as the Secretary may determine under such regulations. “(3) Credit attributable to taxpayer.— “(A) In general.— Except as provided in subparagraph (B) or in any regulations prescribed by the Secretary, any credit under this section shall be attributable to— “(i) in the case of qualified carbon oxide captured using carbon capture equipment which is originally placed in service at a qualified facility before the date of the enactment of the Bipartisan Budget Act of 2018, the person that captures and physically or contractually ensures the disposal, utilization, or use as a tertiary injectant of such qualified carbon oxide, and “(ii) in the case of qualified carbon oxide captured using carbon capture equipment which is originally placed in service at a qualified facility on or after the date of the enactment of the Bipartisan Budget Act of 2018, the person that owns the carbon capture equipment and physically or contractually ensures the capture and disposal, utilization, or use as a tertiary injectant of such qualified carbon oxide. “(B) Election.— If the person described in subparagraph (A) makes an election under this subparagraph in such time and manner as the Secretary may prescribe by regulations, the credit under this section— “(i) shall be allowable to the person that disposes of the qualified carbon oxide, utilizes the qualified carbon oxide, or uses the qualified carbon oxide as a tertiary injectant, and “(ii) shall not be allowable to the person described in subparagraph (A). “(4) Recapture.— The Secretary shall, by regulations, provide for recapturing the benefit of any credit allowable under subsection (a) with respect to any qualified carbon oxide which ceases to be captured, disposed of, or used as a tertiary injectant in a manner consistent with the requirements of this section. “(5) Utilization of qualified carbon oxide.— “(A) In general.— For purposes of this section, utilization of qualified carbon oxide means— “(i) the fixation of such qualified carbon oxide through photosynthesis or chemosynthesis, such as through the growing of algae or bacteria, “(ii) the chemical conversion of such qualified carbon oxide to a material or chemical compound in which such qualified carbon oxide is securely stored, or “(iii) the use of such qualified carbon oxide for any other purpose for which a commercial market exists (with the exception of use as a tertiary injectant in a qualified enhanced oil or natural gas recovery project), as determined by the Secretary. “(B) Measurement.— “(i) In general.— For purposes of determining the amount of qualified carbon oxide utilized by the taxpayer under paragraph (2)(B)(ii) or (4)(B)(ii) of subsection (a), such amount shall be equal to the metric tons of qualified carbon oxide which the taxpayer demonstrates, based upon an analysis of lifecycle greenhouse gas emissions and subject to such requirements as the Secretary, in consultation with the Secretary of Energy and the Administrator of the Environmental Protection Agency, determines appropriate, were— “(I) captured and permanently isolated from the atmosphere, or “(II) displaced from being emitted into the atmosphere, through use of a process described in subparagraph (A). “(ii) Lifecycle greenhouse gas emissions.— For purposes of clause (i), the term ‘lifecycle greenhouse gas emissions’ has the same meaning given such term under subparagraph (H) of section 211(o)(1) of the Clean Air Act (42 U.S.C. 7545(o)(1)), as in effect on the date of the enactment of the Bipartisan Budget Act of 2018, except that ‘product’ shall be substituted for ‘fuel’ each place it appears in such subparagraph. “(6) Election for applicable facilities.— “(A) In general.— For purposes of this section, in the case of an applicable facility, for any taxable year in which such facility captures not less than 500,000 metric tons of qualified carbon oxide during the taxable year, the person described in paragraph (3)(A)(ii) may elect to have such facility, and any carbon capture equipment placed in service at such facility, deemed as having been placed in service on the date of the enactment of the Bipartisan Budget Act of 2018. “(B) Applicable facility.— For purposes of this paragraph, the term ‘applicable facility’ means a qualified facility— “(i) which was placed in service before the date of the enactment of the Bipartisan Budget Act of 2018, and “(ii) for which no taxpayer claimed a credit under this section in regards to such facility for any taxable year ending before the date of the enactment of such Act. “(7) Inflation adjustment.— In the case of any taxable year beginning in a calendar year after 2009, there shall be substituted for each dollar amount contained in paragraphs (1) and (2) of subsection (a) an amount equal to the product of— “(A) such dollar amount, multiplied by “(B) the inflation adjustment factor for such calendar year determined under section 43(b)(3)(B) for such calendar year, determined by substituting ‘2008’ for ‘1990’. “(g) Application of Section for Certain Carbon Capture Equipment.— Consultation. Certification. Time period. In the case of any carbon capture equipment placed in service before the date of the enactment of the Bipartisan Budget Act of 2018, the credit under this section shall apply with respect to qualified carbon oxide captured using such equipment before the end of the calendar year in which the Secretary, in consultation with the Administrator of the Environmental Protection Agency, certifies that, during the period beginning after October 3, 2008, a total of 75,000,000 metric tons of qualified carbon oxide have been taken into account in accordance with— “(1) subsection (a) of this section, as in effect on the day before the date of the enactment of the Bipartisan Budget Act of 2018, and “(2) paragraphs (1) and (2) of subsection (a) of this section. “(h) Regulations.— The Secretary may prescribe such regulations and other guidance as may be necessary or appropriate to carry out this section, including regulations or other guidance to— “(1) ensure proper allocation under subsection (a) for qualified carbon oxide captured by a taxpayer during the taxable year ending after the date of the enactment of the Bipartisan Budget Act of 2018, and “(2) determine whether a facility satisfies the requirements under subsection (d)(1) during such taxable year.” .
2020
Department of the Treasury Appropriations Act, 2021
Pub. L. 116–260 div. EE title I § 121 · 134 Stat. 1182
Substituted · 26 U.S.C. § 45Q(d)(1)
Pub. L. 116–260 substituted “January 1, 2026” for “January 1, 2024” in introductory provisions
Source evidence
Code amendment note
Subsec. (d)(1). Pub. L. 116–260 substituted “January 1, 2026” for “January 1, 2024” in introductory provisions.
Enacted provision · exact public law section
Sec. 121. Within Reports. 45 days after the date of enactment of this Act, the Secretary of the Treasury shall submit an itemized report to the Committees on Appropriations of the House of Representatives and the Senate on the amount of total funds charged to each office by the Franchise Fund including the amount charged for each service provided by the Franchise Fund to each office, a detailed description of the services, a detailed explanation of how each charge for each service is calculated, and a description of the role customers have in governing in the Franchise Fund.
2021
Infrastructure Investment and Jobs Act
Pub. L. 117–58 div. H title IV § 80402(e) · 135 Stat. 429
Added · 26 U.S.C. § 45Q(f)(3)
Pub. L. 117–58 added par. (3) relating to credit reduced for certain tax-exempt bonds at end of subsec. (f)
Source evidence
Code amendment note
Subsec. (f)(3). Pub. L. 117–58 added par. (3) relating to credit reduced for certain tax-exempt bonds at end of subsec. (f).
Enacted provision · exact public law section
(e) Coordination With Credit for Carbon Oxide Sequestration.— Section 45Q(f) of such Code is amended by adding at the end the following new paragraph: “(3) Credit reduced for certain tax-exempt bonds.— The amount of the credit determined under subsection (a) with respect to any project for any taxable year shall be reduced by the amount which is the product of the amount so determined for such year and the lesser of ½ or a fraction— “(A) the numerator of which is the sum, for the taxable year and all prior taxable years, of the proceeds from an issue described in section 142(a)(17) used to provide financing for the project the interest on which is exempt from tax under section 103, and “(B) the denominator of which is the aggregate amount of additions to the capital account for the project for the taxable year and all prior taxable years. The amounts under the preceding sentence for any taxable year shall be determined as of the close of the taxable year.” .
2022
Pub. L. 117–169 § 13104(c)(2)(A) · 136 Stat. 1818
Substituted · 26 U.S.C. § 45Q(b)(1)(A)
Pub. L. 117–169, § 13104(c)(2)(A), substituted “Except as provided in subparagraph (B) or (C), the applicable dollar amount” for “The applicable dollar amount” in introductory provisions
Source evidence
Code amendment note
Subsec. (b)(1)(A). Pub. L. 117–169, § 13104(c)(2)(A), substituted “Except as provided in subparagraph (B) or (C), the applicable dollar amount” for “The applicable dollar amount” in introductory provisions.
Enacted provision · exact public law section
(A) Section 45Q(b)(1)(A) is amended by striking “The applicable dollar amount” and inserting “Except as provided in subparagraph (B) or (C), the applicable dollar amount”.
2022
Pub. L. 117–169 § 13104(b)(1)(A) · 136 Stat. 1818
Substituted · 26 U.S.C. § 45Q(b)(1)(A)(i)(I)
Pub. L. 117–169, § 13104(b)(1)(A), substituted “$17” for “the dollar amount established by linear interpolation between $22.66 and $50 for each calendar year during such period”
Source evidence
Code amendment note
Subsec. (b)(1)(A)(i)(I). Pub. L. 117–169, § 13104(b)(1)(A), substituted “$17” for “the dollar amount established by linear interpolation between $22.66 and $50 for each calendar year during such period”.
Enacted provision · exact public law section
(A) in subclause (I), by striking “the dollar amount” and all that follows through “such period” and inserting “$17”, and
2022
Pub. L. 117–169 § 13104(b)(1)(B) · 136 Stat. 1818
Substituted · 26 U.S.C. § 45Q(b)(1)(A)(i)(II)
Pub. L. 117–169, § 13104(b)(1)(B), substituted “$12” for “the dollar amount established by linear interpolation between $12.83 and $35 for each calendar year during such period”
Source evidence
Code amendment note
Subsec. (b)(1)(A)(i)(II). Pub. L. 117–169, § 13104(b)(1)(B), substituted “$12” for “the dollar amount established by linear interpolation between $12.83 and $35 for each calendar year during such period”.
Enacted provision · exact public law section
(B) in subclause (II), by striking “the dollar amount” and all that follows through “such period” and inserting “$12”, and
2022
Pub. L. 117–169 § 13104(b)(2)(A) · 136 Stat. 1818
Substituted · 26 U.S.C. § 45Q(b)(1)(A)(ii)(I)
Pub. L. 117–169, § 13104(b)(2)(A), substituted “$17” for “$50”
Source evidence
Code amendment note
Subsec. (b)(1)(A)(ii)(I). Pub. L. 117–169, § 13104(b)(2)(A), substituted “$17” for “$50”.
Enacted provision · exact public law section
(A) in subclause (I), by striking “$50” and inserting “$17”, and
2022
Pub. L. 117–169 § 13104(b)(2)(B) · 136 Stat. 1818
Substituted · 26 U.S.C. § 45Q(b)(1)(A)(ii)(II)
Pub. L. 117–169, § 13104(b)(2)(B), substituted “$12” for “$35”
Source evidence
Code amendment note
Subsec. (b)(1)(A)(ii)(II). Pub. L. 117–169, § 13104(b)(2)(B), substituted “$12” for “$35”.
Enacted provision · exact public law section
(B) in subclause (II), by striking “$35” and inserting “$12”.
2022
Pub. L. 117–169 § 13104(c)(1)(B) · 136 Stat. 1818
Redesignated · 26 U.S.C. § 45Q(b)(1)(B); 26 U.S.C. § 45Q(b)(1)(C)
Pub. L. 117–169, § 13104(c)(1)(B), added subpars. (B) and (C). Former subpar. (B) redesignated (D)
Source evidence
Code amendment note
Subsec. (b)(1)(B), (C). Pub. L. 117–169, § 13104(c)(1)(B), added subpars. (B) and (C). Former subpar. (B) redesignated (D).
Enacted provision · exact public law section
(B) by inserting after subparagraph (A) the following new subparagraphs: “(B) Special rule for direct air capture facilities.— In the case of any qualified facility described in subsection (d)(2)(A) which is placed in service after December 31, 2022, the applicable dollar amount shall be an amount equal to the applicable dollar amount otherwise determined with respect to such qualified facility under subparagraph (A), except that such subparagraph shall be applied— “(i) by substituting ‘$36’ for ‘$17’ each place it appears, and “(ii) by substituting ‘$26’ for ‘$12’ each place it appears. “(C) Applicable dollar amount for additional carbon capture equipment.— In the case of any qualified facility which is placed in service before January 1, 2023, if any additional carbon capture equipment is installed at such facility and such equipment is placed in service after December 31, 2022, the applicable dollar amount shall be an amount equal to the applicable dollar amount otherwise determined under this paragraph, except that subparagraph (B) shall be applied— “(i) by substituting ‘before January 1, 2023’ for ‘after December 31, 2022’, and “(ii) by substituting ‘the additional carbon capture equipment installed at such qualified facility’ for ‘such qualified facility’.” .
2022
Pub. L. 117–169 § 13104(c)(2)(B) · 136 Stat. 1818
Substituted · 26 U.S.C. § 45Q(b)(1)(D)
Pub. L. 117–169, § 13104(c)(2)(B), substituted “subparagraph (A), (B), or (C)” for “subparagraph (A)”
Source evidence
Code amendment note
Subsec. (b)(1)(D). Pub. L. 117–169, § 13104(c)(2)(B), substituted “subparagraph (A), (B), or (C)” for “subparagraph (A)”.
Enacted provision · exact public law section
(B) Section 45Q(b)(1)(D), as redesignated by paragraph (1)(A), is amended by striking “subparagraph (A)” and inserting “subparagraph (A), (B), or (C)”.
2022
Pub. L. 117–169 § 13104(c)(1)(A) · 136 Stat. 1818
Redesignated · 26 U.S.C. § 45Q(b)(1)(D)
Pub. L. 117–169, § 13104(c)(1)(A), redesignated subpar. (B) as (D)
Target inherited from the preceding amendment note.
Source evidence
Code amendment note
Pub. L. 117–169, § 13104(c)(1)(A), redesignated subpar. (B) as (D).
Enacted provision · exact public law section
(A) by redesignating subparagraph (B) as subparagraph (D), and
2022
Pub. L. 117–169 § 13104(a)(1) · 136 Stat. 1818
Amended · 26 U.S.C. § 45Q(d)
Pub. L. 117–169, § 13104(a)(1), amended subsec. (d) generally. Prior to amendment, subsec. (d) defined qualified facility
Source evidence
Code amendment note
Subsec. (d). Pub. L. 117–169, § 13104(a)(1), amended subsec. (d) generally. Prior to amendment, subsec. (d) defined qualified facility.
Enacted provision · exact public law section
(1) In general.— Section 45Q(d) 26 USC 45Q. is amended to read as follows: “(d) Qualified Facility.— For purposes of this section, the term ‘qualified facility’ means any industrial facility or direct air capture facility— “(1) the construction of which begins before January 1, 2033, and either— “(A) construction of carbon capture equipment begins before such date, or “(B) the original planning and design for such facility includes installation of carbon capture equipment, and “(2) which— “(A) in the case of a direct air capture facility, captures not less than 1,000 metric tons of qualified carbon oxide during the taxable year, “(B) in the case of an electricity generating facility— “(i) captures not less than 18,750 metric tons of qualified carbon oxide during the taxable year, and “(ii) with respect to any carbon capture equipment for the applicable electric generating unit at such facility, has a capture design capacity of not less than 75 percent of the baseline carbon oxide production of such unit, or “(C) in the case of any other facility, captures not less than 12,500 metric tons of qualified carbon oxide during the taxable year.” .
2022
Pub. L. 117–169 § 13104(a)(2)(A) · 136 Stat. 1818
1. Added · 26 U.S.C. § 45Q(e)
  Pub. L. 117–169, § 13104(a)(2)(A), added pars. (1) and (2)
2. Redesignated · 26 U.S.C. § 45Q(e)
  Pub. L. 117–169, § 13104(a)(2)(A), redesignated former pars. (1) to (3) as (3) to (5), respectively
Source evidence
Code amendment note
Subsec. (e). Pub. L. 117–169, § 13104(a)(2)(A), added pars. (1) and (2) and redesignated former pars. (1) to (3) as (3) to (5), respectively.
Enacted provision · exact public law section
(A) In general.— Section 45Q(e) is amended— (i) by redesignating paragraphs (1) through (3) as paragraphs (3) through (5), respectively, and (ii) by inserting after “For purposes of this section—” the following new paragraphs: “(1) Applicable electric generating unit.— The term ‘applicable electric generating unit’ means the principal electric generating unit for which the carbon capture equipment is originally planned and designed. “(2) Baseline carbon oxide production.— “(A) In general.— The term ‘baseline carbon oxide production’ means either of the following: “(i) In the case of an applicable electric generating unit which was originally placed in service more than 1 year prior to the date on which construction of the carbon capture equipment begins, the average annual carbon oxide production, by mass, from such unit during— “(I) in the case of an applicable electric generating unit which was originally placed in service more than 1 year prior to the date on which construction of the carbon capture equipment begins and on or after the date which is 3 years prior to the date on which construction of such equipment begins, the period beginning on the date such unit was placed in service and ending on the date on which construction of such equipment began, and “(II) in the case of an applicable electric generating unit which was originally placed in service more than 3 years prior to the date on which construction of the carbon capture equipment begins, the 3 years with the highest annual carbon oxide production during the 12-year period preceding the date on which construction of such equipment began. “(ii) In the case of an applicable electric generating unit which— “(I) as of the date on which construction of the carbon capture equipment begins, is not yet placed in service, or “(II) was placed in service during the 1-year period prior to the date on which construction of the carbon capture equipment begins, the designed annual carbon oxide production, by mass, as determined based on an assumed capacity factor of 60 percent. “(B) Capacity factor.— The term ‘capacity factor’ means the ratio (expressed as a percentage) of the actual electric output from the applicable electric generating unit to the potential electric output from such unit.” .
2022
Pub. L. 117–169 § 13104(e)(1) · 136 Stat. 1818
Struck · 26 U.S.C. § 45Q(f)(3)
Pub. L. 117–169, § 13104(e)(1), struck out par. (3) which had appeared after par. (7) and related to credit reduced for certain tax-exempt bonds
Source evidence
Code amendment note
Subsec. (f)(3). Pub. L. 117–169, § 13104(e)(1), struck out par. (3) which had appeared after par. (7) and related to credit reduced for certain tax-exempt bonds.
Enacted provision · exact public law section
(1) by striking the second paragraph (3), as added at the end of such section by section 80402(e) of the Infrastructure Investment and Jobs Act (Public Law 117-58), and
2022
Pub. L. 117–169 § 13104(e)(2) · 136 Stat. 1818
Added · 26 U.S.C. § 45Q(f)(8)
Pub. L. 117–169, § 13104(e)(2), added par. (8)
Source evidence
Code amendment note
Subsec. (f)(8). Pub. L. 117–169, § 13104(e)(2), added par. (8).
Enacted provision · exact public law section
(2) by adding at the end the following new paragraph: “(8) Credit reduced for tax-exempt bonds.— Rules similar to the rule under section 45(b)(3) shall apply for purposes of this section.” .
2022
Pub. L. 117–169 § 13104(g) · 136 Stat. 1818
Added · 26 U.S.C. § 45Q(f)(9)
Pub. L. 117–169, § 13104(g), added par. (9)
Source evidence
Code amendment note
Subsec. (f)(9). Pub. L. 117–169, § 13104(g), added par. (9).
Enacted provision · exact public law section
(g) Election.— Section 45Q(f), as amended by subsection (e), is amended by adding at the end the following new paragraph: “(9) Election.— For purposes of paragraphs (3) and (4) of subsection (a), a person described in paragraph (3)(A)(ii) may elect, at such time and in such manner as the Secretary may prescribe, to have the 12–year period begin on the first day of the first taxable year in which a credit under this section is claimed with respect to carbon capture equipment which is originally placed in service at a qualified facility on or after the date of the enactment of the Bipartisan Budget Act of 2018 (after application of paragraph (6), where applicable) if— “(A) no taxpayer claimed a credit under this section with respect to such carbon capture equipment for any prior taxable year, “(B) the qualified facility at which such carbon capture equipment is placed in service is located in an area affected by a federally-declared disaster (as defined by section 165(i)(5)(A)) after the carbon capture equipment is originally placed in service, and “(C) such federally-declared disaster results in a cessation of the operation of the qualified facility or the carbon capture equipment after such equipment is originally placed in service.” .
2022
Pub. L. 117–169 § 13104(f) · 136 Stat. 1818
Inserted · 26 U.S.C. § 45Q(g)
Pub. L. 117–169, § 13104(f), inserted “the earlier of January 1, 2023, and” before “the end of the calendar year” in introductory provisions
Source evidence
Code amendment note
Subsec. (g). Pub. L. 117–169, § 13104(f), inserted “the earlier of January 1, 2023, and” before “the end of the calendar year” in introductory provisions.
Enacted provision · exact public law section
(f) Application of Section for Certain Carbon Capture Equipment.— Section 45Q(g) is amended by inserting “the earlier of January 1, 2023, and” before “the end of the calendar year”.
2022
Pub. L. 117–169 § 13104(d) · 136 Stat. 1818
1. Added · 26 U.S.C. § 45Q(h); 26 U.S.C. § 45Q(i)
  Pub. L. 117–169, § 13104(d), added subsec. (h)
2. Redesignated · 26 U.S.C. § 45Q(h); 26 U.S.C. § 45Q(i)
  Pub. L. 117–169, § 13104(d), redesignated former subsec. (h) as (i)
Source evidence
Code amendment note
Subsecs. (h), (i). Pub. L. 117–169, § 13104(d), added subsec. (h) and redesignated former subsec. (h) as (i).
Enacted provision · exact public law section
(d) Wage and Apprenticeship Requirements.— Section 45Q is amended by redesignating subsection (h) as subsection (i) and inserting after subsection (g) following new subsection: “(h) Increased Credit Amount for Qualified Facilities and Carbon Capture Equipment.— “(1) In general.— In the case of any qualified facility or any carbon capture equipment which satisfy the requirements of paragraph (2), the amount of the credit determined under subsection (a) shall be equal to such amount (determined without regard to this sentence) multiplied by 5. “(2) Requirements.— The requirements described in this paragraph are that— “(A) with respect to any qualified facility the construction of which begins on or after the date that is 60 days after the Secretary publishes guidance with respect to the requirements of paragraphs (3)(A) and (4), as well as any carbon capture equipment placed in service at such facility— “(i) subject to subparagraph (B) of paragraph (3), the taxpayer satisfies the requirements under subparagraph (A) of such paragraph with respect to such facility and equipment, and “(ii) the taxpayer satisfies the requirements under paragraph (4) with respect to the construction of such facility and equipment, “(B) with respect to any carbon capture equipment the construction of which begins on or after the date that is 60 days after the Secretary publishes guidance with respect to the requirements of paragraphs (3)(A) and (4), and which is installed at a qualified facility the construction of which began prior to such date— “(i) subject to subparagraph (B) of paragraph (3), the taxpayer satisfies the requirements under subparagraph (A) of such paragraph with respect to such equipment, and “(ii) the taxpayer satisfies the requirements under paragraph (4) with respect to the construction of such equipment, or “(C) the construction of carbon capture equipment begins prior to the date that is 60 days after the Secretary publishes guidance with respect to the requirements of paragraphs (3)(A) and (4), and such equipment is installed at a qualified facility the construction of which begins prior to such date. “(3) Prevailing wage requirements.— “(A) In general.— The requirements described in this subparagraph with respect to any qualified facility and any carbon capture equipment placed in service at such facility are that the taxpayer shall ensure that any laborers and mechanics employed by the taxpayer or any contractor or subcontractor in— “(i) the construction of such facility or equipment, and “(ii) with respect to any taxable year, for any portion of such taxable year which is within the period described in paragraph (3)(A) or (4)(A) of subsection (a), the alteration or repair of such facility or such equipment, shall be paid wages at rates not less than the prevailing rates for construction, alteration, or repair of a similar character in the locality in which such facility and equipment are located as most recently determined by the Secretary of Labor, in accordance with subchapter IV of chapter 31 of title 40, United States Code. For purposes of determining an increased credit amount under paragraph (1) for a taxable year, the requirement under clause (ii) of this subparagraph is applied to such taxable year in which the alteration or repair of qualified facility occurs. “(B) Correction and penalty related to failure to satisfy wage requirements.— Rules similar to the rules of section 45(b)(7)(B) shall apply. “(4) Apprenticeship requirements.— Rules similar to the rules of section 45(b)(8) shall apply. “(5) Regulations and guidance.— The Secretary shall issue such regulations or other guidance as the Secretary determines necessary to carry out the purposes of this subsection, including regulations or other guidance which provides for requirements for recordkeeping or information reporting for purposes of administering the requirements of this subsection.” .
2022
Pub. L. 117–169 § 13104(h) · 136 Stat. 1818
Added · 26 U.S.C. § 45Q(i)(3)
Pub. L. 117–169, § 13104(h), added par. (3)
Source evidence
Code amendment note
Subsec. (i)(3). Pub. L. 117–169, § 13104(h), added par. (3).
Enacted provision · exact public law section
(h) Regulations for Baseline Carbon Oxide Production.— Subsection (i) of section 45Q, as redesignated by subsection (d), is amended— (1) in paragraph (1), by striking “and”, (2) in paragraph (2), by striking the period at the end and inserting “, and”, and (3) by adding at the end the following new paragraph: “(3) for purposes of subsection (d)(2)(B)(ii), adjust the baseline carbon oxide production with respect to any applicable electric generating unit at any electricity generating facility if, after the date on which the carbon capture equipment is placed in service, modifications which are chargeable to capital account are made to such unit which result in a significant increase or decrease in carbon oxide production.” .
2025
Pub. L. 119–21 § 70522(b)(1)(B) · 139 Stat. 279
1. Added · 26 U.S.C. § 45Q(a)(3)(B)
  Pub. L. 119–21, § 70522(b)(1)(B), added subpar. (B)
2. Struck · 26 U.S.C. § 45Q(a)(3)(B)
  Pub. L. 119–21, § 70522(b)(1)(B), struck out former subpar. (B) which read as follows: “disposed of by the taxpayer in secure geological storage and not used by the taxpayer as described in paragraph (4)(B), and”
Unresolved: Pub. L. 119–21 was not found in the local Statutes at Large index.
Source evidence
Code amendment note
Subsec. (a)(3)(B). Pub. L. 119–21, § 70522(b)(1)(B), added subpar. (B) and struck out former subpar. (B) which read as follows: “disposed of by the taxpayer in secure geological storage and not used by the taxpayer as described in paragraph (4)(B), and”.
Effective date note
Pub. L. 119–21, title VII, § 70522(d), July 4, 2025, 139 Stat. 280, provided that:
2025
Pub. L. 119–21 § 70522(b)(1)(A) · 139 Stat. 279
Struck · 26 U.S.C. § 45Q(a)(4)
Pub. L. 119–21, § 70522(b)(1)(A), (C), struck out par. (4) which read as follows: “the applicable dollar amount (as determined under subsection (b)(1)) per metric ton of qualified carbon oxide which is—
Unresolved: Pub. L. 119–21 was not found in the local Statutes at Large index.
Source evidence
Code amendment note
Subsec. (a)(4). Pub. L. 119–21, § 70522(b)(1)(A), (C), struck out par. (4) which read as follows: “the applicable dollar amount (as determined under subsection (b)(1)) per metric ton of qualified carbon oxide which is—
“(A) captured by the taxpayer using carbon capture equipment which is originally placed in service at a qualified facility on or after the date of the enactment of the Bipartisan Budget Act of 2018, during the 12-year period beginning on the date the equipment was originally placed in service, and “(B)(i) used by the taxpayer as a tertiary injectant in a qualified enhanced oil or natural gas recovery project and disposed of by the taxpayer in secure geological storage, or “(ii) utilized by the taxpayer in a manner described in subsection (f)(5).”
Effective date note
Pub. L. 119–21, title VII, § 70522(d), July 4, 2025, 139 Stat. 280, provided that:
2025
Pub. L. 119–21 § 70522(b)(2)(A)(i) · 139 Stat. 279
1. Added · 26 U.S.C. § 45Q(b)(1)(A)
  Pub. L. 119–21, § 70522(b)(2)(A)(i), added subpar. (A)
2. Struck · 26 U.S.C. § 45Q(b)(1)(A)
  Pub. L. 119–21, § 70522(b)(2)(A)(i), struck out former subpar. (A). Prior to amendment, text read as follows: “Except as provided in subparagraph (B) or (C), the applicable dollar amount shall be an amount equal to—
Unresolved: Pub. L. 119–21 was not found in the local Statutes at Large index.
Source evidence
Code amendment note
Subsec. (b)(1)(A). Pub. L. 119–21, § 70522(b)(2)(A)(i), added subpar. (A) and struck out former subpar. (A). Prior to amendment, text read as follows: “Except as provided in subparagraph (B) or (C), the applicable dollar amount shall be an amount equal to—
“(i) for any taxable year beginning in a calendar year after 2016 and before 2027— “(I) for purposes of paragraph (3) of subsection (a), $17, and “(II) for purposes of paragraph (4) of such subsection, $12, and “(ii) for any taxable year beginning in a calendar year after 2026— “(I) for purposes of paragraph (3) of subsection (a), an amount equal to the product of $17 and the inflation adjustment factor for such calendar year determined under section 43(b)(3)(B) for such calendar year, determined by substituting ‘2025’ for ‘1990’, and “(II) for purposes of paragraph (4) of such subsection, an amount equal to the product of $12 and the inflation adjustment factor for such calendar year determined under section 43(b)(3)(B) for such calendar year, determined by substituting ‘2025’ for ‘1990’.”
Effective date note
Pub. L. 119–21, title VII, § 70522(d), July 4, 2025, 139 Stat. 280, provided that:
2025
Pub. L. 119–21 § 70522(b)(2)(A)(ii) · 139 Stat. 279
Substituted · 26 U.S.C. § 45Q(b)(1)(B)
Pub. L. 119–21, § 70522(b)(2)(A)(ii), substituted “shall be applied by substituting ‘$36’ for ‘$17’ each place it appears.” for “shall be applied—
Unresolved: Pub. L. 119–21 was not found in the local Statutes at Large index.
Source evidence
Code amendment note
Subsec. (b)(1)(B). Pub. L. 119–21, § 70522(b)(2)(A)(ii), substituted “shall be applied by substituting ‘$36’ for ‘$17’ each place it appears.” for “shall be applied—
“(i) by substituting ‘$36’ for ‘$17’ each place it appears, and “(ii) by substituting ‘$26’ for ‘$12’ each place it appears.”
Effective date note
Pub. L. 119–21, title VII, § 70522(d), July 4, 2025, 139 Stat. 280, provided that:
2025
Pub. L. 119–21 § 70522(b)(2)(B) · 139 Stat. 279
Substituted · 26 U.S.C. § 45Q(b)(2)(B)
Pub. L. 119–21, § 70522(b)(2)(B), substituted “paragraph (3)(A)” for “paragraphs (3)(A) and (4)(A)” in introductory provisions
Unresolved: Pub. L. 119–21 was not found in the local Statutes at Large index.
Source evidence
Code amendment note
Subsec. (b)(2)(B). Pub. L. 119–21, § 70522(b)(2)(B), substituted “paragraph (3)(A)” for “paragraphs (3)(A) and (4)(A)” in introductory provisions.
Effective date note
Pub. L. 119–21, title VII, § 70522(d), July 4, 2025, 139 Stat. 280, provided that:
2025
Pub. L. 119–21 § 70522(b)(2)(C) · 139 Stat. 279
Substituted · 26 U.S.C. § 45Q(b)(3)
Pub. L. 119–21, § 70522(b)(2)(C), substituted “the dollar amount applicable under paragraph (3)” for “the dollar amounts applicable under paragraph (3) or (4)”
Unresolved: Pub. L. 119–21 was not found in the local Statutes at Large index.
Source evidence
Code amendment note
Subsec. (b)(3). Pub. L. 119–21, § 70522(b)(2)(C), substituted “the dollar amount applicable under paragraph (3)” for “the dollar amounts applicable under paragraph (3) or (4)”.
Effective date note
Pub. L. 119–21, title VII, § 70522(d), July 4, 2025, 139 Stat. 280, provided that:
2025
Pub. L. 119–21 § 70522(b)(3)(A) · 139 Stat. 279
Substituted · 26 U.S.C. § 45Q(f)(5)(B)(i)
Pub. L. 119–21, § 70522(b)(3)(A), substituted “(3)(B)(iii)” for “(4)(B)(ii)” in introductory provisions
Unresolved: Pub. L. 119–21 was not found in the local Statutes at Large index.
Source evidence
Code amendment note
Subsec. (f)(5)(B)(i). Pub. L. 119–21, § 70522(b)(3)(A), substituted “(3)(B)(iii)” for “(4)(B)(ii)” in introductory provisions.
Effective date note
Pub. L. 119–21, title VII, § 70522(d), July 4, 2025, 139 Stat. 280, provided that:
2025
Pub. L. 119–21 § 70522(b)(3)(B) · 139 Stat. 279
Substituted · 26 U.S.C. § 45Q(f)(9)
Pub. L. 119–21, § 70522(b)(3)(B), substituted “subsection (a)(3)” for “paragraphs (3) and (4) of subsection (a)” in introductory provisions
Unresolved: Pub. L. 119–21 was not found in the local Statutes at Large index.
Source evidence
Code amendment note
Subsec. (f)(9). Pub. L. 119–21, § 70522(b)(3)(B), substituted “subsection (a)(3)” for “paragraphs (3) and (4) of subsection (a)” in introductory provisions.
Effective date note
Pub. L. 119–21, title VII, § 70522(d), July 4, 2025, 139 Stat. 280, provided that:
2025
Pub. L. 119–21 § 70522(a) · 139 Stat. 279
Added · 26 U.S.C. § 45Q(f)(10)
Pub. L. 119–21, § 70522(a), added par. (10)
Unresolved: Pub. L. 119–21 was not found in the local Statutes at Large index.
Source evidence
Code amendment note
Subsec. (f)(10). Pub. L. 119–21, § 70522(a), added par. (10).
Effective date note
Pub. L. 119–21, title VII, § 70522(d), July 4, 2025, 139 Stat. 280, provided that:
2025
Pub. L. 119–21 § 70522(b)(4) · 139 Stat. 279
Substituted · 26 U.S.C. § 45Q(h)(3)(A)(ii)
Pub. L. 119–21, § 70522(b)(4), substituted “subsection (a)(3)(A)” for “paragraph (3)(A) or (4)(A) of subsection (a)”
Unresolved: Pub. L. 119–21 was not found in the local Statutes at Large index.
Source evidence
Code amendment note
Subsec. (h)(3)(A)(ii). Pub. L. 119–21, § 70522(b)(4), substituted “subsection (a)(3)(A)” for “paragraph (3)(A) or (4)(A) of subsection (a)”.
Effective date note
Pub. L. 119–21, title VII, § 70522(d), July 4, 2025, 139 Stat. 280, provided that:

29 of 41 references resolved to an enrolled provision · 12 unresolved

Notes

Inflation Adjusted Items for Certain Tax Years

For inflation adjustment of certain items in this section, see Internal Revenue Notices listed in a table below.

Editorial Notes

References in Text

The date of the enactment of the Bipartisan Budget Act of 2018 and the date of the enactment of such Act, referred to in text, is the date of enactment of Pub. L. 115–123, which was approved Feb. 9, 2018.

The date of enactment of this paragraph, referred to in subsec. (f)(10), is the date of enactment of Pub. L. 119–21, which was approved July 4, 2025.

Amendments2009–2025 · 7 rounds

2025

Subsec. (a)(3)(B). Pub. L. 119–21, § 70522(b)(1)(B), added subpar. (B) and struck out former subpar. (B) which read as follows: “disposed of by the taxpayer in secure geological storage and not used by the taxpayer as described in paragraph (4)(B), and”.

Subsec. (a)(4). Pub. L. 119–21, § 70522(b)(1)(A), (C), struck out par. (4) which read as follows: “the applicable dollar amount (as determined under subsection (b)(1)) per metric ton of qualified carbon oxide which is—

“(A) captured by the taxpayer using carbon capture equipment which is originally placed in service at a qualified facility on or after the date of the enactment of the Bipartisan Budget Act of 2018, during the 12-year period beginning on the date the equipment was originally placed in service, and

“(B)(i) used by the taxpayer as a tertiary injectant in a qualified enhanced oil or natural gas recovery project and disposed of by the taxpayer in secure geological storage, or

“(ii) utilized by the taxpayer in a manner described in subsection (f)(5).”

Subsec. (b)(1)(A). Pub. L. 119–21, § 70522(b)(2)(A)(i), added subpar. (A) and struck out former subpar. (A). Prior to amendment, text read as follows: “Except as provided in subparagraph (B) or (C), the applicable dollar amount shall be an amount equal to—

“(i) for any taxable year beginning in a calendar year after 2016 and before 2027—

“(I) for purposes of paragraph (3) of subsection (a), $17, and

“(II) for purposes of paragraph (4) of such subsection, $12, and

“(ii) for any taxable year beginning in a calendar year after 2026—

“(I) for purposes of paragraph (3) of subsection (a), an amount equal to the product of $17 and the inflation adjustment factor for such calendar year determined under section 43(b)(3)(B) for such calendar year, determined by substituting ‘2025’ for ‘1990’, and

“(II) for purposes of paragraph (4) of such subsection, an amount equal to the product of $12 and the inflation adjustment factor for such calendar year determined under section 43(b)(3)(B) for such calendar year, determined by substituting ‘2025’ for ‘1990’.”

Subsec. (b)(1)(B). Pub. L. 119–21, § 70522(b)(2)(A)(ii), substituted “shall be applied by substituting ‘$36’ for ‘$17’ each place it appears.” for “shall be applied—

“(i) by substituting ‘$36’ for ‘$17’ each place it appears, and

“(ii) by substituting ‘$26’ for ‘$12’ each place it appears.”

Subsec. (b)(2)(B). Pub. L. 119–21, § 70522(b)(2)(B), substituted “paragraph (3)(A)” for “paragraphs (3)(A) and (4)(A)” in introductory provisions.

Subsec. (b)(3). Pub. L. 119–21, § 70522(b)(2)(C), substituted “the dollar amount applicable under paragraph (3)” for “the dollar amounts applicable under paragraph (3) or (4)”.

Subsec. (f)(5)(B)(i). Pub. L. 119–21, § 70522(b)(3)(A), substituted “(3)(B)(iii)” for “(4)(B)(ii)” in introductory provisions.

Subsec. (f)(9). Pub. L. 119–21, § 70522(b)(3)(B), substituted “subsection (a)(3)” for “paragraphs (3) and (4) of subsection (a)” in introductory provisions.

Subsec. (f)(10). Pub. L. 119–21, § 70522(a), added par. (10).

Subsec. (h)(3)(A)(ii). Pub. L. 119–21, § 70522(b)(4), substituted “subsection (a)(3)(A)” for “paragraph (3)(A) or (4)(A) of subsection (a)”.

2022

Subsec. (b)(1)(A). Pub. L. 117–169, § 13104(c)(2)(A), substituted “Except as provided in subparagraph (B) or (C), the applicable dollar amount” for “The applicable dollar amount” in introductory provisions.

Subsec. (b)(1)(A)(i)(I). Pub. L. 117–169, § 13104(b)(1)(A), substituted “$17” for “the dollar amount established by linear interpolation between $22.66 and $50 for each calendar year during such period”.

Subsec. (b)(1)(A)(i)(II). Pub. L. 117–169, § 13104(b)(1)(B), substituted “$12” for “the dollar amount established by linear interpolation between $12.83 and $35 for each calendar year during such period”.

Subsec. (b)(1)(A)(ii)(I). Pub. L. 117–169, § 13104(b)(2)(A), substituted “$17” for “$50”.

Subsec. (b)(1)(A)(ii)(II). Pub. L. 117–169, § 13104(b)(2)(B), substituted “$12” for “$35”.

Subsec. (b)(1)(B), (C). Pub. L. 117–169, § 13104(c)(1)(B), added subpars. (B) and (C). Former subpar. (B) redesignated (D).

Subsec. (b)(1)(D). Pub. L. 117–169, § 13104(c)(2)(B), substituted “subparagraph (A), (B), or (C)” for “subparagraph (A)”.

Pub. L. 117–169, § 13104(c)(1)(A), redesignated subpar. (B) as (D).

Subsec. (d). Pub. L. 117–169, § 13104(a)(1), amended subsec. (d) generally. Prior to amendment, subsec. (d) defined qualified facility.

Subsec. (e). Pub. L. 117–169, § 13104(a)(2)(A), added pars. (1) and (2) and redesignated former pars. (1) to (3) as (3) to (5), respectively.

Subsec. (f)(3). Pub. L. 117–169, § 13104(e)(1), struck out par. (3) which had appeared after par. (7) and related to credit reduced for certain tax-exempt bonds.

Subsec. (f)(8). Pub. L. 117–169, § 13104(e)(2), added par. (8).

Subsec. (f)(9). Pub. L. 117–169, § 13104(g), added par. (9).

Subsec. (g). Pub. L. 117–169, § 13104(f), inserted “the earlier of January 1, 2023, and” before “the end of the calendar year” in introductory provisions.

Subsecs. (h), (i). Pub. L. 117–169, § 13104(d), added subsec. (h) and redesignated former subsec. (h) as (i).

Subsec. (i)(3). Pub. L. 117–169, § 13104(h), added par. (3).

2021

Subsec. (f)(3). Pub. L. 117–58 added par. (3) relating to credit reduced for certain tax-exempt bonds at end of subsec. (f).

2020

Subsec. (d)(1). Pub. L. 116–260 substituted “January 1, 2026” for “January 1, 2024” in introductory provisions.

2018

Pub. L. 115–123 amended section generally. Prior to amendment, section related to credit for carbon dioxide sequestration.

2014

Subsec. (d)(2). Pub. L. 113–295 substituted “Administrator of the Environmental Protection Agency, the Secretary of Energy, and the Secretary of the Interior, shall establish” for “Administrator of the Environmental Protection Agency the Secretary of Energy, and the Secretary of the Interior,, shall establish”.

2009

Subsec. (a)(1)(B). Pub. L. 111–5, § 1131(b)(2), inserted “and not used by the taxpayer as described in paragraph (2)(B)” after “storage”.

Subsec. (a)(2)(C). Pub. L. 111–5, § 1131(a), added subpar. (C).

Subsec. (d)(2). Pub. L. 111–5, § 1131(b)(1), inserted “the Secretary of Energy, and the Secretary of the Interior,” after “Environmental Protection Agency” and substituted “paragraph (1)(B) or (2)(C) of subsection (a)” for “subsection (a)(1)(B)” and “, oil and gas reservoirs, and unminable coal seams” for “and unminable coal seems”.

Subsec. (e). Pub. L. 111–5, § 1131(b)(3), substituted “taken into account in accordance with subsection (a)” for “captured and disposed of or used as a tertiary injectant”.

Statutory Notes and Related Subsidiaries

Effective Date of 2025 Amendment

Pub. L. 119–21, title VII, § 70522(d), July 4, 2025, 139 Stat. 280, provided that:

“(1)
Restrictions relating to prohibited foreign entities.—
The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after the date of enactment of this Act [July 4, 2025].
#
“(2)
Parity for different uses and utilizations of qualified carbon oxide.—
The amendments made [sic] subsections (b) and (c) [amending this section and section 6417 of this title] shall apply to facilities or equipment placed in service after the date of enactment of this Act.”
#

Effective Date of 2022 Amendment

Pub. L. 117–169, title I, § 13104(i), Aug. 16, 2022, 136 Stat. 1929, provided that:

“(1)
In general.—
Except as provided in paragraphs (2), (3), and (4), the amendments made by this section [amending this section and section 142 of this title] shall apply to facilities or equipment placed in service after December 31, 2022.
#
“(2)
Modification of carbon oxide capture requirements.—
The amendments made by subsection (a) [amending this section and section 142 of this title] shall apply to facilities or equipment the construction of which begins after the date of enactment of this Act [Aug. 16, 2022].
#
“(3)
Application of section for certain carbon capture equipment.—
The amendments made by subsection (f) [amending this section] shall take effect on the date of enactment of this Act.
#
“(4)
Election.—
The amendments made by subsection (g) [amending this section] shall apply to carbon oxide captured and disposed of after December 31, 2021.”
#

Effective Date of 2021 Amendment

Pub. L. 117–58, div. H, title IV, § 80402(f), Nov. 15, 2021, 135 Stat. 1334, provided that: “The amendments made by this section [amending this section and sections 141, 142, and 146 of this title] shall apply to obligations issued after December 31, 2021.”

Effective Date of 2018 Amendment

Pub. L. 115–123, div. D, title II, § 41119(b), Feb. 9, 2018, 132 Stat. 168, provided that: “The amendment made by this section [amending this section] shall apply to taxable years beginning after December 31, 2017.”

Effective Date of 2014 Amendment

Amendment by Pub. L. 113–295 effective as if included in the provisions of the American Recovery and Reinvestment Tax Act of 2009, Pub. L. 111–5, div. B, title I, to which such amendment relates, see section 209(k) of Pub. L. 113–295, set out as a note under section 24 of this title.

Effective Date of 2009 Amendment

Pub. L. 111–5, div. B, title I, § 1131(c), Feb. 17, 2009, 123 Stat. 325, provided that: “The amendments made by this section [amending this section] shall apply to carbon dioxide captured after the date of the enactment of this Act [Feb. 17, 2009].”

Effective Date

Section applicable to carbon dioxide captured after Oct. 3, 2008, see section 115(d) of Pub. L. 110–343, set out as an Effective Date of 2008 Amendment note under section 38 of this title.

Executive Documents

Inflation Adjusted Items for Certain Years2010–2026 · 17 rounds

Provisions relating to inflation adjustment of items in this section for certain years were contained in the following:

2026

Internal Revenue Notice 2026–29.

2025

Internal Revenue Notice 2025–25.

2024

Internal Revenue Notice 2024–39.

2023

Internal Revenue Notice 2023–46.

2022

Internal Revenue Notice 2022–38.

2021

Internal Revenue Notice 2021–35.

2020

Internal Revenue Notice 2020–40.

2019

Internal Revenue Notice 2019–31.

2018

Internal Revenue Notice 2018–40.

2017

Internal Revenue Notice 2017–32.

2016

Internal Revenue Notice 2016–53.

2015

Internal Revenue Notice 2015–44.

2014

Internal Revenue Notice 2014–40.

2013

Internal Revenue Notice 2013–34.

2012

Internal Revenue Notice 2012—42.

2011

Internal Revenue Notice 2011–50.

2010

Internal Revenue Notice 2010–75.

Credits

2008–2025 · 8 acts

2008Added Pub. L. 110–343, div. B, title I, § 115(a), Oct. 3, 2008, 122 Stat. 3829
2009amended Pub. L. 111–5, div. B, title I, § 1131(a), (b), Feb. 17, 2009, 123 Stat. 325
2014Pub. L. 113–295, div. A, title II, § 209(j)(1), Dec. 19, 2014, 128 Stat. 4030
2018Pub. L. 115–123, div. D, title II, § 41119(a), Feb. 9, 2018, 132 Stat. 162
2020Pub. L. 116–260, div. EE, title I, § 121, Dec. 27, 2020, 134 Stat. 3051
2021Pub. L. 117–58, div. H, title IV, § 80402(e), Nov. 15, 2021, 135 Stat. 1334
2022Pub. L. 117–169, title I, § 13104(a)(1), (2)(A), (b)–(h), Aug. 16, 2022, 136 Stat. 1924–1928
2025Pub. L. 119–21, title VII, § 70522(a), (b), July 4, 2025, 139 Stat. 279.

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(Added Pub. L. 110–343, div. B, title I, § 115(a), Oct. 3, 2008, 122 Stat. 3829; amended Pub. L. 111–5, div. B, title I, § 1131(a), (b), Feb. 17, 2009, 123 Stat. 325; Pub. L. 113–295, div. A, title II, § 209(j)(1), Dec. 19, 2014, 128 Stat. 4030; Pub. L. 115–123, div. D, title II, § 41119(a), Feb. 9, 2018, 132 Stat. 162; Pub. L. 116–260, div. EE, title I, § 121, Dec. 27, 2020, 134 Stat. 3051; Pub. L. 117–58, div. H, title IV, § 80402(e), Nov. 15, 2021, 135 Stat. 1334; Pub. L. 117–169, title I, § 13104(a)(1), (2)(A), (b)–(h), Aug. 16, 2022, 136 Stat. 1924–1928; Pub. L. 119–21, title VII, § 70522(a), (b), July 4, 2025, 139 Stat. 279.)