The Treasury Department and the IRS recently published final regulations on the section 45Q carbon oxide sequestration credit that provide guidelines on various open items on which taxpayers have sought clarity since section 45Q was overhauled as part of the Bipartisan Budget Act of 2018. The new regulations also consider dozens of comment letters received from taxpayers, industry participants, environmental groups, and other stakeholders in response to the notice of proposed rulemaking released on May 28, 2020.
The final regulations set forth guidance that will allow many taxpayers to move ahead with claiming this federal income tax credit or entering into a tax credit equity transaction to help finance a carbon capture project. Although these regulations address several issues, open questions remain that will require clarification in future guidance.
Find out more
A new tax alert from Deloitte Tax LLP provides an overview of the regulations.
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