Carbon Capture Credits (45Q)
Tax Credits for Carbon Sequestration Projects
The Section 45Q credit provides substantial tax benefits for carbon capture, utilization, and sequestration (CCUS) projects. The Inflation Reduction Act of 2022 dramatically increased credit amounts and made credits transferable, creating new opportunities for investors and industrial facilities to monetize carbon capture investments. Credits can exceed $85 per metric ton for direct air capture with permanent geological storage.
See Your Potential Savings
Based on a typical client profile for this strategy
Real Results: Client Success Story
"An industrial facility captures and permanently stores 100,000 metric tons of CO2 annually. At $85/ton credit rate (2024+ with wage/apprentice bonus), annual credit is $8.5 million for 12-year period."
*Illustrative scenario for educational purposes. Tax savings depend on individual circumstances, income level, entity structure, and proper implementation. Consult with a tax professional to determine eligibility.
Do You Qualify? Quick Self-Assessment
This strategy may be right for you if:
Check 3 or more? You may be a good candidate for this strategy. Schedule a free consultation to calculate your potential savings.
Investment Levels
- Current situation analysis
- Tax reduction opportunities
- Action item roadmap
- Follow-up summary
- Full financial analysis
- Multi-year projections
- Entity optimization
- Implementation support
- Quarterly planning calls
- Transaction review
- Legislative updates
- Priority access
- Structure analysis
- Document preparation
- IRS filings
- Transition planning
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Explore the Details
For those who want to understand the full picture
Real-World Example: Before & After
An industrial facility captures and permanently stores 100,000 metric tons of CO2 annually. At $85/ton credit rate (2024+ with wage/apprentice bonus), annual credit is $8.5 million for 12-year period.
BEFORE Strategy
AFTER Strategy
100,000 tons × $85/ton = $8.5M annual credit. Direct air capture with storage earns highest rate. Credits can be transferred to tax equity investors or sold under IRA provisions. 12-year credit period from placed-in-service.
IRS Authority & Professional References
Key Benefits
- $85/ton for direct air capture with geological storage
- $60/ton for industrial capture with geological storage
- 12-year credit period from placed-in-service
- Transferable to buyers or direct pay option
- Stacks with depreciation and other benefits
- Addresses climate goals while generating returns
Requirements & Risks
Requirements:
- •Minimum capture thresholds (varies by facility type)
- •Qualified carbon capture equipment
- •Secure geological storage or qualified utilization
- •Prevailing wage and apprenticeship for full credit
- •Third-party verification of captured amounts
- •EPA Class VI well permits for geological storage
Risks to Consider:
- !High capital costs for capture equipment
- !Technology and operational risks
- !Storage site permitting challenges
- !12-year commitment required
- !Credit recapture if CO2 released
- !Complex regulatory environment
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