SECTION 1. PURPOSE
Internal Revenue Bulletin 2026-36 · 2026-10-03 edition · updated 2026-10-04 · United States
Notice 2026-1, 2026-4 I.R.B. 365, provides interim guidance, pending the issuance of forthcoming proposed regulations, relating to the credit for carbon oxide sequestration under § 45Q (§ 45Q credit) of the Internal Revenue Code (Code) 1 in light of the Environmental Protection Agency’s (EPA) proposed regulations to remove reporting obligations regarding the geological sequestration of carbon dioxide imposed under subpart RR of 40 CFR part 98 (subpart RR) of the Greenhouse Gas Reporting Program (GHGRP). See 90 F.R. 44591 (Sept. 16, 2025). This notice modifies and amplifies Notice 2026-1 by expanding the scope of the safe harbor provided in Notice 2026-1 to include qualified carbon oxide that is used as a tertiary injectant in a qualified enhanced oil or natural gas recovery project and the determination of the amount of qualified carbon oxide subject to recapture. This notice also extends the applicability date of the safe harbor provided in Notice 2026-1.
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