Section 45Q Carbon Oxide Sequestration Credit
Federal tax credit per metric ton for capturing and storing or using carbon oxide emissions, up to $85/ton for geologic sequestration.
About this program
Section 45Q provides a per-metric-ton federal tax credit for the capture and qualifying disposition of carbon oxides. Under IRA, the credit is up to $85/ton for geologic sequestration, $60/ton for utilization or enhanced oil recovery, and $180/ton for direct air capture with geologic sequestration. Facilities must begin construction by January 1, 2033 and meet prevailing wage and apprenticeship requirements for the bonus credit. Credits are transferable and qualifying entities can elect direct pay for the first five years.
Eligibility
Owners of qualified facilities that capture, dispose of, or utilize qualified carbon oxide. Industrial emitters, direct air capture facilities, and enhanced oil recovery operations may qualify.
Requirements
- Confirm facility qualifies as a 'qualified facility' under Section 45Q
- Begin construction by January 1, 2033
- Meet prevailing wage and apprenticeship requirements for full credit