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19 December 2025

IRS provides reporting safe harbor for IRC Section 45Q carbon sequestration credit

The IRS on December 19, 2025, in Notice 2026-1, provides a temporary safe harbor that allows taxpayers to claim the IRC Section 45Q carbon oxide sequestration credit for the 2025 calendar year in the event the EPA does not open its electronic greenhouse gas reporting system by June 10, 2026. Under the safe harbor, taxpayers may instead rely on certified documentation prepared and verified by an independent engineer or geologist to demonstrate compliance with secure geological storage requirements. A Tax Alert is forthcoming.

Published by NTD’s Tax Technical Knowledge Services group; Andrea Ben-Yosef, legal editor

Document ID: 2025-2575

 

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