Read more about the current Greenbook proposals. ...
This site uses cookies to ensure that we give you the best user experience. Cookies assist in navigation, analyzing traffic and in our marketing efforts as described in our Privacy Policy.
The 2016 tax year will be an historic one for the Energy and Natural Resources industry with the return of the Enhanced Oil Recovery (EOR) Credit. This credit has been phased out completely for the past 10 tax years due to the average domestic first purchase price (reference price) per barrel of oil being too high.
In accordance with Internal Revenue Service Notice 2016-44, the reference price per barrel of oil for the 2015 calendar year was $44.39. That amount did not exceed $28 multiplied by the inflation adjustment factor (IAF) of 1.6464 ($46.10) for 2015. Therefore, there is no phase-out of the EOR credit for qualified costs paid or incurred in tax years beginning in calendar year 2016.
The enhanced oil recovery credit is equal to 15% of the taxpayer’s qualified enhanced oil recovery costs for the tax year. “Qualified enhanced oil recovery costs” means any of the following:
The Internal Revenue Service plans to issue a revised Form 8830, Enhanced Oil Recovery Credit, for filing with tax returns for tax years beginning in 2016; however, to date, no revision has been posted to the Service’s website. Pass-through entities should pass the information for the credit to their partners/shareholders via Schedule K-1 to be claimed on individual tax returns.
It is the Internal Revenue Service’s intention, during March of 2017, to determine if the credit will be available for tax years beginning in 2017.
Visit our Energy and Resources industry group page to learn about the services that we offer and read the Our Thoughts On blog for similar articles.
As a follow up, the IRS has released the new Form 8830, updated for the 2016 tax year. It can be found here: https://www.irs.gov/pub/irs-pdf/f8830.pdf
Read more about the current Greenbook proposals. ...
Learn more about the regional and national supply chain implications of the Baltimore Key Bridge collapse. ...
We’d love to hear from you. Drop us a note, and we’ll respond to you as quickly as possible.
Ask us
[email protected]
p:412.261.3644
f:412.261.4876
[email protected]
p:614.621.4060
f:614.621.4062
[email protected]
p:571.380.9003