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Revenue Ruling Clarifies Issues Concerning IRC Section 45Q Carbon Capture Credits
The Internal Revenue Service (IRS) today released a ruling clarifying several issues related to Internal Revenue Code (IRC) Section 45Q carbon capture tax credits. Revenue Ruling 2021-13 determines that acid gas removal at an industrial facility is a component of carbon capture equipment within the meaning of the IRC 45Q credit; that an investor in components of capture equipment at an industrial facility doesn’t need to own every component in a single-process train to receive the credit, but must own at least one component; that under IRC Section 45Q, the placed-in-service date of a single-process train of carbon capture equipment is the date it is placed in condition or a state of readiness and availability for the capture, processing and preparation of carbon oxide for transport for disposal, injection or use; and the original placed-in-service date of a single-process train for IRC Section 45Q has no effect on the placed-in-service date of the existing acid gas removal unit for depreciation under IRC Sections 167 and 168.
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