Investment Tax Credit for Carbon Capture, Utilization, and Storage (CCUS ITC)
no fixed amount
Tax Credit
Description:
CCUS is a suite of technologies that capture carbon dioxide (CO2) emissions from fuel combustion, industrial processes, or directly from the air, to either store the CO2 or use it in industry. Businesses that incur qualified CCUS expenditures after 2021 and before 2041 can claim the new refundable CCUS ITC.
Comments on Funding:
The credit rates are as follows for qualified CCUS expenditures for:
1. eligible capture equipment used in a direct air capture project, 60% after 2021 (30% after 2030);
2. all other eligible capture equipment, 50% after 2021 (25% after 2030);
3. eligible transportation, storage, and use equipment, 37.5% after 2021 (18.75% after 2030).
Rolling deadline
Eligibility:
The applicant must be a business that incurs qualified CCUS expenditures after 2021 and before 2041, including:
1. eligible capture equipment used in a direct air capture project;
2. eligible transportation, storage and use equipment;
3. Corporations must track and account for the capture and actual usage of CO2.
Application Steps:
On line 200 of Schedule 31, applicants must enter the amount of the CCUS ITC youthey are claiming. A form that details how the credit is calculated will be made available later. In the meantime, provide the information as detailed at Federal tax credits
Documentation Needed:
Applicants must provide a completed Line 200 of Schedule 31, and other required forms as requested.
Other Things to Note:
Effective November 28, 2023, businesses have to meet certain labour requirements – prevailing wage requirements and apprenticeship requirements. Otherwise, the credit rate will be reduced by 10 percentage points. Exemptions apply for the CCUS ITC for acquisitions of off‑road zero emission vehicles and acquisitions and installations of low carbon heat equipment
About the author
Maurice
