Revenue Ruling Clarifies Issues Concerning IRC Section 45Q Carbon Capture Credits

Thursday, July 1, 2021 - 10:15am

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.

Stay updated on the latest developments in renewable energy by subscribing to the Novogradac Journal of Tax Credits.