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ARTICLE · 20 AUGUST 2026

Treasury Expands And Extends Section 45Q Subpart RR Safe Harbor

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The Treasury Department and IRS have issued Notice 2026-50, expanding the safe harbor for section 45Q carbon capture tax credits by extending Subpart RR reporting requirements to enhanced oil recovery projects and establishing a transition period tied to future guidance. This interim relief addresses critical gaps in the carbon capture regulatory framework while Treasury seeks public comment on permanent alternatives to EPA's Greenhouse Gas Reporting Program requirements.

United StatesTax
N. Hunter Johnston
N. Hunter Johnston
Lisa Zarlenga
Lisa Zarlenga
John Cobb
John Cobb
Nick Sutter
Nick Sutter

Overview

On August 14, 2026, the Treasury Department (Treasury) and the Internal Revenue Service (IRS) issued Notice 2026-50 providing additional interim guidance related to the section 45Q credit to extend and expand the existing safe harbor provided under Notice 2026-1. The safe harbor preserves reporting requirements for the section 45Q credit for taxpayers that report under Subpart RR of the Environmental Protection Agency’s (EPA) Greenhouse Gas Reporting Program (GHGRP) until further guidance is issued.

Notice 2026-50 provides meaningful additional certainty for existing projects that have entered the Subpart RR framework. It expands the safe harbor originally provided in Notice 2026-1 in three key ways:

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