Notice 2024-61

Section 43(a) of the Internal Revenue Code provides that for purposes of sec

tion 38, the enhanced oil recovery credit for any taxable year is an amount equal to 15 percent of the taxpayer’s qualified enhanced oil recovery costs for such taxable year.

Section 43(b)(1) provides that the amount of the credit determined under subsection (a) for any taxable year shall be reduced by an amount which bears the same ratio to the amount of such credit (determined without regard to this paragraph) as — (A) the amount by which the reference price for the calendar year preceding the calendar year in which the taxable years begins exceeds $28, bears to (B) $6.

Section 43(b)(3)(B) requires the Secretary to publish an inflation adjustment factor. The enhanced oil recovery credit under § 43 for any taxable year is reduced if the “reference price,” determined under § 45K(d)(2)(C), for the calendar year preceding the calendar year in which the taxable year begins is greater than $28 multiplied by the inflation adjustment factor the current calendar year.

The term “inflation adjustment factor” means, with respect to any calendar year, a fraction the numerator of which is the GNP implicit price deflator for the preceding calendar year and the denominator of which is the GNP implicit price deflator for 1990.

Because the reference price for the 2023 calendar year ($76.10) exceeds $28 multiplied by the inflation adjustment factor for the 2024 calendar year ($28 multiplied by 2.0615= $57.72) by $18.38, the enhanced oil recovery credit for qualified costs paid or incurred in 2024 is phased out completely.

August 19, 2024 520 Bulletin No. 2024–34

Table 1 contains the GNP implicit price deflator used for the 2023 calendar year, as well as the previously published GNP implicit price deflators used for the 1991 through 2022 calendar years.