Fillable Form 8933 - Carbon Dioxide Sequestration Credit

Form 8933 (2012)

Page

General Instructions

See Notice 2009-83, 2009-44 I.R.B. 588, for more information on secure

geological storage. Notice 2009-83 is available at

Section references are to the Internal Revenue Code.

ar11.html.

Tertiary Injectant

Future Developments

This is an injectant (other than a hydrocarbon injectant that is recoverable) that is

For the latest information about developments related to Form 8933 and its

used as part of a tertiary recovery method. For more details, see section 193(b).

instructions, such as legislation enacted after they were published, go to

Qualified Enhanced Oil or Natural Gas Recovery Project

Purpose of Form

A qualified enhanced oil or natural gas recovery project means any project located

in the United States involving the application of one or more tertiary recovery

Use Form 8933 to claim the carbon dioxide sequestration credit. The credit is

methods defined in section 193(b)(3) that can reasonably be expected to result in

allowed for qualified carbon dioxide that is captured and disposed of or captured,

more than an insignificant increase in the amount of crude oil or natural gas that

used, and disposed of by the taxpayer in secure geological storage. Only carbon

will ultimately be recovered and with respect to which the first injection of liquids,

dioxide captured and disposed of or used as a tertiary injectant within the United

gases, or other matter commences after 1990. The project will not be treated as a

States or a U.S. possession is taken into account when figuring the credit. See

qualified enhanced crude oil or natural gas recovery project unless the operator

Definitions, below.

submits to the IRS a certification from a petroleum engineer that the project meets

(and continues to meet) these requirements.

For the purposes of this form, a partner in a partnership that has made a valid

section 761(a) election will be considered the taxpayer. Partnerships with valid

United States and U.S. Possessions

section 761(a) elections are not required to complete or file this form. Instead, the

partner is required to complete and file this form in a manner commensurate with

This includes the seabed and subsoil of those submarine areas that are adjacent

its undivided ownership interest in the qualified facility.

to the territorial waters of the United States (or a U.S. possession) and over which

the United States has exclusive rights according to international law with respect

Taxpayers other than partnerships or S corporations whose only source of this

to the exploration and exploitation of natural resources.

credit is from those pass-through entities (other than a partnership with a valid

761(a) election) are not required to complete or file this form. Instead, report this

Who Can Take the Credit

credit directly on line 1x of Form 3800, General Business Credit.

Generally, the credit is allowed to the person that captures and physically or

How To Figure the Credit

contractually ensures the disposal of or the use as a tertiary injectant of the

qualified carbon dioxide.

Generally, the credit is $20 (adjusted for inflation) per metric ton for qualified

See Notice 2009-83 for the annual report that is required if the credit is claimed.

carbon dioxide captured at a qualified facility, disposed of in secure geological

storage, and not used as a tertiary injectant in a qualified enhanced oil or natural

Specific Instructions

gas recovery project.

Generally, the credit is $10 (adjusted for inflation) per metric ton for qualified

In order to claim the credit, the amount of carbon dioxide must be measured at the

carbon dioxide captured at a qualified facility, used as a tertiary injectant in a

source of capture and verified either at the point of disposal in secure geological

qualified enhanced oil or natural gas recovery project, and disposed of in secure

storage or at the point of injection as a tertiary injectant in an enhanced oil or

geological storage.

natural gas recovery project. The amount of qualified carbon dioxide is presumed

to be the lesser of the amount measured at capture and the amount verified at

For the purpose of calculating the credit, a metric ton of carbon dioxide includes

disposal or injection, unless it can be established to the satisfaction of the IRS that

only the contained weight of the carbon dioxide. The weight of any other

the greater amount is the correct amount.

substances, such as water or impurities, is not included in the calculation.

Line 1

Inflation Adjustment

Enter the metric tons of qualified carbon dioxide captured at a qualified facility,

For 2012, the $20 and $10 rates are adjusted for inflation.

disposed of in secure geological storage, and not used as a tertiary injectant in a

The 2012 credit rates are:

qualified enhanced oil or natural gas recovery project. Then, multiply the metric

• $20.88 for qualified carbon dioxide captured at a qualified facility, disposed of in

tons entered by $20.88.

secure geological storage, and not used as a tertiary injectant in a qualified

Line 2

enhanced oil or natural gas recovery project; and

Enter the metric tons of qualified carbon dioxide captured at a qualified facility,

• $10.44 for qualified carbon dioxide captured at a qualified facility, disposed of in

used as a tertiary injectant in a qualified enhanced oil or natural gas recovery

secure geological storage, and used as a tertiary injectant in a qualified enhanced

project, and disposed of in secure geological storage. Then, multiply the metric

oil or natural gas recovery project.

tons entered by $10.44.

Definitions

Paperwork Reduction Act Notice. We ask for the information on this form to

Qualified Carbon Dioxide

carry out the Internal Revenue laws of the United States. You are required to give

Qualified carbon dioxide is carbon dioxide captured after October 3, 2008, from an

us the information. We need it to ensure that you are complying with these laws

industrial source that:

and to allow us to figure and collect the right amount of tax.

• Would otherwise be released into the atmosphere as industrial emission of

You are not required to provide the information requested on a form that is

greenhouse gas, and

subject to the Paperwork Reduction Act unless the form displays a valid OMB

control number. Books or records relating to a form or its instructions must be

• Is measured at the source of capture and verified at the point of disposal or

retained as long as their contents may become material in the administration of

injection.

any Internal Revenue law. Generally, tax returns and return information are

Qualified carbon dioxide also includes the initial deposit of captured carbon

confidential, as required by section 6103.

dioxide used as a tertiary injectant. However, it does not include carbon dioxide

The time needed to complete and file this form will vary depending on individual

that is re-captured, recycled, or otherwise re-injected as part of the enhanced oil

circumstances. The estimated burden for individual taxpayers filing this form is

and natural gas recovery process.

approved under OMB control number 1545-0074 and is included in the estimates

Qualified Facility

shown in the instructions for their individual income tax return. The estimated

burden for all other taxpayers who file this form is shown below.

A qualified facility is any industrial facility that is owned by the taxpayer where

Recordkeeping .

. 1 hr., 54 min.

carbon capture equipment is placed in service and that captures at least 500,000

metric tons of carbon dioxide during the tax year.

Learning about the law or the form

. 6 min.

Industrial Facility

Preparing and sending the form

to the IRS

. 7 min.

An industrial facility is a facility that produces a carbon dioxide stream from a fuel

If you have comments concerning the accuracy of these time estimates or

combustion source, a manufacturing process, or a fugitive carbon dioxide

suggestions for making this form simpler, we would be happy to hear from you.

emission source that, absent capture and disposal, would otherwise be released

See the instructions for the tax return with which this form is filed.

into the atmosphere as industrial emission of greenhouse gas. An industrial facility

does not include a facility that produces carbon dioxide from carbon dioxide

production wells at natural carbon-dioxide-bearing formations.

Secure Geological Storage

This includes storage at deep saline formations, oil and gas reservoirs, and

unminable coal seams under such conditions as the IRS may determine under

regulations.

Form 8933 - Carbon Dioxide Sequestration Credit - 2012 Page 2

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