Developers and Tax Equity Investors Receive More Guidance on Carbon Capture Credit Requirements

Tax Law Update | July.01.2020

On February 9, 2018, Congress passed the Bipartisan Budget Act (the "BBA"), which included changes to the tax credit provided under §45Q for carbon capture and sequestration. While the statutory framework was in place, developers and potential investors needed additional guidance on the requirements and procedures for claiming the credit before the multi-billion dollar industry centered around the amended §45Q credit could break ground. Proposed Regulations released by the IRS and the Treasury Department in May of this year are an important step in the right direction. This article contains an in-depth discussion of the Proposed Regulations and identifies areas that need some additional attention.