IRS Issues 2011 Inflation Adjustment Factor for Carbon Dioxide Capture Credit (Notice 2011-50)

The IRS has released the 2011 inflation adjustment factor for the carbon dioxide (CO2) sequestration credit. The 2011 inflation-adjusted credit applies to the amount of qualified CO2 captured by a taxpayer at a qualified facility and disposed of in secure geological storage. The inflation adjustment factor for 2011 is 1.0187. The credit is $20.37 per metric ton of qualified CO2 under Code Sec. 45Q(a)(1) and $10.19 per metric ton of qualified CO2 under Code Sec. 45Q(a)(2).

Code Sec. 45Q provides a credit of $20 per metric ton of qualified CO2 that is captured at a qualified facility, disposed of by the taxpayer at a secure geological site and not used by the taxpayer as a tertiary injectant. Qualified CO2 must be captured from an industrial source that would otherwise release it into the atmosphere as greenhouse gas and it must be measured at the source of capture and verified at the point of disposal or injection. For tax years beginning after December 31, 2009, the dollar amount in Code Sec. 45Q(a) must be adjusted for inflation by multiplying $20 by the inflation adjustment factor for the calendar year as determined under Code Sec. 43(b)(3)(B) using 2008 instead of 1990 as the base year.

Notice 2011-50, 2011FED ¶46,391

Other References:

Code Sec. 45Q

CCH Reference – 2011FED ¶4500ZL.45

Tax Research Consultant

CCH Reference – TRC BUSEXP: 55,600


Wolters Kluwer Tax and Accounting

Wolters Kluwer Tax and Accounting is a leading provider of software solutions and local expertise that helps tax, accounting, and audit professionals research and navigate complex regulations, comply with legislation, manage their businesses and advise clients with speed, accuracy and efficiency. Wolters Kluwer Tax and Accounting is part of Wolters Kluwer N.V. (AEX: WKL), a global leader in information services and solutions for professionals in the health, tax and accounting, risk and compliance, finance and legal sectors. We help our customers make critical decisions every day by providing expert solutions that combine deep domain knowledge with specialized technology and services. Wolters Kluwer reported 2016 annual revenues of €4.3 billion. The company, headquartered in Alphen aan den Rijn, the Netherlands, serves customers in over 180 countries, maintains operations in over 40 countries and employs 19,000 people worldwide. Wolters Kluwer shares are listed on Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices. Wolters Kluwer has a sponsored Level 1 American Depositary Receipt program. The ADRs are traded on the over-the-counter market in the U.S. (WTKWY).

All stories by: Wolters Kluwer Tax and Accounting