What Is The 45Q Federal Tax Incentive?

February 22, 2023

The 45Q federal tax incentive is related to capturing and storing of carbon (CCS). Under the 45Q tax incentive, businesses and other entities can receive a tax credit for capturing carbon dioxide (CO2) from industrial processes or power generation and storing it underground or using it for enhanced oil recovery. The credit is based on the amount of CO2 captured and stored or used, and the credit amount varies depending on the type of storage or use.

To receive the 45Q tax credit, a project must be certified by the Internal Revenue Service (IRS) and meet certain requirements, including demonstrating that the CO2 is captured and stored or used in a secure and permanent manner.

It is important to note that while the 45Q tax incentive is available to all qualifying projects regardless of the project owner’s identity, the process of applying for and receiving the credit can be complex and may require significant expertise and resources. Dynamic Carbon Credits is an expert in this field. We offer the “DCC Buying Platform”, so you can gain access to high quality carbon credits which have been vetted and approved by the proper channels. To learn even more about the 45Q federal tax incentive, here is an additional link for your review:

Credits and Deductions Under the Inflation Reduction Act of 2022 | Internal Revenue Service (irs.gov)

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