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26 U.S. Code § 45Q

IRA Statuatory Location:

13104

Tax Code Location:

26 U.S. Code § 45Q

New or Modified Provision:

Extended and modified, tying the credit amounts to meeting prevailing wage and registered apprenticeship requirements, providing an enhanced credit for direct air capture (DAC), and lowering the carbon capture threshold requirements at facilities.

Eligible Recipients:

U.S. facilities within minimum volumes: 1,000 metric tons of CO2 per year for DAC facilities; 18,750 metric tons for electricity generating facilities (with carbon capture capacity of 75% of baseline CO2 production); 12,500 metric tons for other facilities.

Tribal Eligibility:

Yes

Funded by:

U.S. Department of Treasury

Description

Provides a credit for carbon dioxide sequestration coupled with permitted end uses within the United States.
Direct Pay Eligibility:
5 times the base amounts if the facility meets prevailing wage and. (federalreg)ister.gov/documents/2022/11/30/2022-26108/prevailing-wage-and-apprenticeship-initial-guidance-under-section-45b6bii-and-other-substantially registered apprenticeship requirements. Initial guidance on the labor provisions is available here
Transferability:
Yes
Stackability:
Credit reduced for tax-exempt bonds with similar rules as section 45(b)(3).
Energy Community Bonus:
No

Relevant Announcements

Related Resources

Additional information is available on the Resources page.

Key Details

Period of Availability
Credit can be claimed for 12 years after a facility is placed in service.Facilities must be placed in service before 1/1/33.
Tax Mechanism:
Production tax credit based on carbon capture and sequestration, injection forenhanced oil recovery (EOR), or utilization
Base Credit Amount:
$17/metric ton of carbon dioxide captured and sequestered; $12/metricton for carbon dioxide that is injected for enhanced oil recovery or utilized. Those amounts are$36 and $26, respectively, for direct air capture facilities
Bonus Credit Amount:
5 times the base amounts if the facility meets prevailing wage and. (federalreg)ister.gov/documents/2022/11/30/2022-26108/prevailing-wage-and-apprenticeship-initial-guidance-under-section-45b6bii-and-other-substantially registered apprenticeship requirements. Initial guidance on the labor provisions is available here
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