IRS Ruling Provides Guidance on Carbon Capture Equipment and Section 45Q Credit

On July 1, 2021, the US Internal Revenue Service (the “IRS”) released Revenue Ruling 2021-13 (the “Ruling”), which provides additional guidance on the definition of “carbon capture equipment” for purposes of the carbon capture tax credit under Section 45Q of the Internal Revenue Code of 1986, as amended (the “Code”). The Ruling also clarifies that a taxpayer need not own every piece of equipment within a single process train in order to claim the tax credit so long as the taxpayer owns at least one component. In addition, the Ruling provides helpful guidance on determining the placed-in-service date of the single process train for purposes of Section 45Q.

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