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ARTICLE · 01 APRIL 2021

IRS Issues Final Regulations On Section 45Q Carbon Capture Credits

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The U.S. Internal Revenue Service (IRS) and the U.S. Treasury Department ("Treasury") have issued final regulations (T.D. 9944) (the "Final Regulations") providing additional guidance on...

United StatesTax
Ryan Bray
Ryan Bray
Larry Crouch
Larry Crouch
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The U.S. Internal Revenue Service (IRS) and the U.S. Treasury Department ("Treasury") have issued final regulations (T.D. 9944) (the "Final Regulations") providing additional guidance on several aspects of the income tax credit for the capture of qualified carbon oxide (CO) under section 45Q of the Internal Revenue Code of 1986, as amended (the "Code").1 By largely adopting the proposed regulations released on May 28, 2020 (REG -112339-19) (the "Proposed Regulations"), discussed in our client alert dated June 22, 2020, with certain helpful modifications, the Final Regulations aim to alleviate some of the uncertainty previously faced by developers and should attract more widespread attention and investor participation.

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