Section 45Q proposed regulations released

Eversheds Sutherland (US) LLP

Eversheds Sutherland (US) LLPOn May 28, 2020, the Internal Revenue Service (IRS) released a notice of proposed rulemaking (NPRM) on the IRC section 45Q carbon capture and sequestration (CCS) credit in order to implement changes made to that tax credit by the Bipartisan Budget Act of 2018. A link to the NPRM is provided: click here. The NPRM was highly anticipated by stakeholders given the limited statutory window to begin construction on a qualified facility before January 1, 2024. Comments are requested within 60 days, which indicates a desire on the part of the IRS to issue final regulations expeditiously.

This NPRM follows two recent pieces of guidance under IRC section 45Q: IRS Notice 2020-12 addresses the beginning of construction requirement for CCS projects and Revenue Procedure 2020-12 addresses allocations of section 45Q credits in partnership flip structures. For our coverage of Notice 2020-12 and Revenue Procedure 2020-12, click here.

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