Page 81 - IRS Business Tax Credits Guide

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Fileid: … ns/i8933/202212/a/xml/cycle06/source
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
General Instructions the equipment was originally placed in service, (2)
disposed of by you in secure geological storage, and (3)
Purpose of Form neither used as a tertiary injectant in a qualified EOR or
natural gas recovery project nor utilized in a manner
Use Form 8933 to claim the section 45Q carbon oxide described in section 45Q(f)(5).
sequestration credit. See Definitions, later. Section 45Q(a)(4) allows a credit of the applicable
For purposes of this form, a partner in a partnership dollar amount (as determined under section 45Q(b)(1))
that has made a valid section 761(a) election will be per metric ton of qualified carbon oxide (1) captured by
considered the taxpayer. Partnerships with valid section you using carbon capture equipment that’s originally
761(a) elections aren’t required to complete or file this placed in service at a qualified facility on or after February
form. Instead, the partner is required to complete and file 9, 2018, during the 12-year period beginning on the date
this form in a manner commensurate with its undivided the equipment was originally placed in service; and (2)
ownership interest in the qualified facility. Also, see Rev. either (a) used by you as a tertiary injectant in a qualified
Proc. 2020-12, 2020-11, I.R.B. 511, for allocation safe EOR or natural gas recovery project and disposed of by
harbor. However, if you elect to use the TD, the section you in secure geological storage, or (b) utilized in a
761(a) election applies only in the case of qualified carbon manner described in section 45Q(f)(5).
oxide captured using carbon capture equipment that's For purposes of determining the credit, you may elect
originally placed in service at a qualified facility before under section 45Q(b)(3) to have the dollar amounts
February 9, 2018. For qualified carbon oxide captured applicable under section 45Q(a)(1) or (2) apply in lieu of
using carbon capture equipment that's originally placed in the dollar amounts applicable under section 45Q(a)(3) or
service at a qualified facility on or after February 9, 2018, (4) for each metric ton of qualified carbon oxide that’s
for each single process train of carbon capture equipment captured by you using carbon capture equipment that’s
(as described in Regulations section 1.45Q-2(c)(3)), only originally placed in service at a qualified facility on or after
one taxpayer will be considered the person to whom the February 9, 2018.
credit is attributable and only that person may claim the
carbon oxide sequestration credit. See Regulations For the purpose of calculating the credit, a metric ton of
section 1.45Q-1(h)(1). carbon oxide includes only the contained weight of the
carbon oxide. The weight of any other substances, such
Taxpayers other than partnerships or S corporations as water or impurities, isn’t included in the calculation.
whose only source of this credit is from those
pass-through entities (other than a partnership with a valid 2022 credit rates and applicable dollar amounts. The
761(a) election) aren’t required to complete or file this credit rates for lines 1b, 2b, and 3b are increased by the
form. Instead, report this credit directly on line 1x in Part III adjustment for inflation. The rates are as follows.
of Form 3800, General Business Credit. • Line 1b: $25.07 per metric ton.
• Line 2b: $12.53 per metric ton.
How To Figure the Credit • Line 3b: $12.53 per metric ton.
Subject to the section 45Q(f)(3)(B) election (discussed See Notice 2022-38, 2022-39 I.R.B. 239, available at
later), section 45Q(a)(1) allows a credit of $20 per metric IRS.gov/irb/2022-39_IRB#NOT-2022-38.
ton of qualified carbon oxide captured by you using For any tax year beginning in a calendar year after
carbon capture equipment that’s (1) originally placed in 2016 and before 2027, the section 45Q(b)(1)(A)
service at a qualified facility before February 9, 2018, (2) applicable dollar amounts for lines 4b, 5b, and 6b are
disposed of by you in secure geological storage, and (3) established by linear interpolation between $22.66 and
not used by you as a tertiary injectant in a qualified $50, and $12.83 and $35, respectively. The applicable
enhanced oil recovery (EOR) or natural gas recovery dollar amounts are as follows.
project or utilized by you in a manner described in section • Line 4b: $37.85 per metric ton.
45Q(f)(5). • Line 5b: $25.15 per metric ton.
Section 45Q(a)(2) allows a credit of $10 per metric ton • Line 6b: $25.15 per metric ton.
of qualified carbon oxide (1) captured by you using carbon See Notice 2018-93, 2018-51 I.R.B. 1041, available at
capture equipment that’s originally placed in service at a IRS.gov/irb/2018-51_IRB#NOT-2018-93.
qualified facility before February 9, 2018; and (2) either (a) After 2022, the applicable dollar amounts are as
used by you as a tertiary injectant in a qualified EOR or follows.
natural gas recovery project and disposed of by you in • Line 4b: $17 per metric ton ($85 per metric ton if section
secure geological storage, or (b) utilized by you in a 45Q(h)(2) requirements are met).
manner described in section 45Q(f)(5). • Line 5b: $12 per metric ton ($60 per metric ton if section
Section 45Q(a)(3) allows a credit of the applicable 45Q(h)(2) requirements are met).
dollar amount (as determined under section 45Q(b)(1)) • Line 6b: $12 per metric ton ($60 per metric ton if section
per metric ton of qualified carbon oxide (1) captured by 45Q(h)(2) requirements are met).
you using carbon capture equipment that’s originally For direct air capture facilities placed in service after
placed in service at a qualified facility on or after February 2022, the section 45Q(b)(1)(B) applicable dollar amounts
9, 2018, during the 12-year period beginning on the date are as follows.

-2- Instructions for Form 8933 (Rev. 12-2022)