IRS Form 8933 (Schedule C) – In the evolving landscape of energy production and environmental sustainability, the IRS offers tax incentives to encourage responsible practices in the oil and gas industry. One such incentive is the Carbon Oxide Sequestration Credit, claimed via Form 8933. Specifically, Schedule C (Form 8933) focuses on the Enhanced Oil Recovery (EOR) Operator Certification, allowing operators to certify their projects for credit eligibility. This article breaks down everything you need to know about IRS Form 8933 Schedule C, including its purpose, eligibility, filing process, and recent updates. Whether you’re an oil recovery operator or a tax professional, this guide will help you navigate the certification requirements effectively.
What Is IRS Form 8933 Schedule C?
IRS Form 8933 Schedule C, officially titled “Enhanced Oil Recovery Operator Certification,” is a supplementary schedule to Form 8933, which is used to claim the Section 45Q Carbon Oxide Sequestration Credit. This credit rewards taxpayers for capturing and securely storing carbon oxide (CO) from industrial sources, reducing greenhouse gas emissions while boosting oil and gas recovery.
Schedule C is specifically for operators (or designated operators) of EOR projects where qualified carbon oxide is injected as a tertiary injectant to enhance oil or natural gas recovery. By certifying the project, operators provide essential details to project owners, enabling them to claim the credit on their tax returns. This form ensures compliance with environmental and tax regulations, promoting secure geological storage of CO.
The primary goal of this certification is to verify that the injected CO meets qualification standards, including measurement, verification, and secure storage, aligning with broader U.S. efforts to combat climate change through carbon capture and utilization.
Who Needs to File Schedule C (Form 8933)?
If you’re the operator or designated operator of an enhanced oil recovery project involving CO injection, you must complete and file Schedule C. This applies to projects using tertiary recovery methods as defined under Section 193(b)(3) of the Internal Revenue Code, where the injection is expected to significantly increase crude oil or natural gas production.
Key scenarios where filing is required:
- The project is located in the United States or under U.S. territorial jurisdiction.
- The first injection of liquids, gases, or other matter occurred after 1990.
- Qualified carbon oxide is captured from an industrial source and verified at the injection point.
- Compliance with Underground Injection Control (UIC) regulations is maintained.
Owners of the EOR project (who claim the credit) rely on this certification from the operator. If the project involves multiple owners, such as partnerships or S corporations, the operator provides entity-level information rather than individual details. Note that this schedule is attached to Form 8933 and filed with your timely federal income tax return or Form 1065, including extensions.
Eligibility Requirements for EOR Operator Certification
To qualify for certification under Schedule C, your EOR project must meet stringent criteria to ensure environmental integrity and tax compliance:
- Project Location and Methods: The project must use tertiary recovery techniques in the U.S., with injections leading to meaningful production increases.
- Carbon Oxide Standards: CO must be captured from equipment placed in service before or after February 9, 2018, and measured/verified at capture and injection points.
- Secure Storage Compliance:
- For facilities pre-February 9, 2018: Requires an EPA-approved Monitoring, Reporting, and Verification (MRV) Plan under 40 CFR Part 98 subpart RR.
- For facilities on or after February 9, 2018: Compliance with 40 CFR Part 98 subpart RR or CSA/ANSI ISO 27916:19 standards, including mass balance calculations.
- Credit Attribution: The credit goes to the owner of the capture equipment who ensures injection and storage, often via contracts.
- Prohibitions: No credit for taxpayers classified as specified foreign entities under Section 7701(a)(51)(B) or foreign-influenced entities under Section 7701(a)(51)(D) for tax years after July 4, 2025.
Additionally, if claiming increased credit amounts (multiplied by 5), projects must satisfy prevailing wage and apprenticeship requirements, with Form 7220 filed separately.
How to Complete and File IRS Form 8933 Schedule C?
Filling out Schedule C involves providing detailed project and operational information. Here’s a step-by-step overview based on IRS guidelines:
- Operator Information: Enter your name, address, Taxpayer Identification Number (TIN), and the EOR project’s location (county and state).
- Metric Tons Injected: Report the number of metric tons of qualified carbon oxide injected during the tax year, verified at the injection point.
- Certifications:
- Attach a petroleum engineer’s certification (per Regulations section 1.43-3(a)(3)) for the first year of injection, stating it’s for Section 45Q purposes.
- For subsequent years, include continued certification under Regulations section 1.43-3(b)(3) until injection ceases.
- Contract Details: If disposal or injection is ensured via contracts, list parties, execution dates, metric tons, and identifiers like EPA e-GGRT ID.
- Annual Certification: Affirm compliance with storage standards, including monitoring and reporting.
- Attachment and Filing: Attach Schedule C to Form 8933 and provide copies to project owners. File by the due date of your return; late certifications may be accepted with amended returns in certain cases.
For multiple suppliers or owners, prepare separate schedules as needed.
Download IRS Form 8933 Schedule C
To get started, download the latest version of Schedule C (Form 8933) directly from the IRS website. The current revision is December 2025, suitable for the 2025 tax year. Download Schedule C (Form 8933) PDF here.
Always verify the form’s revision date on the IRS site to ensure you’re using the most up-to-date version.
Recent Updates and Credit Rates for 2025-2026
The IRS regularly updates Form 8933 and its schedules to reflect legislative changes. For the 2025 tax year:
- Credit Rates: If electing inflation-adjusted rates under Section 45Q(b)(3), the rate is $14.21 per metric ton (up from prior years per Notice 2025-25).
- Post-July 4, 2025 Facilities: Base credit standardized at $17 per metric ton, with inflation adjustments for 2026.
- Increased Credits: Rates can be multiplied by 5 if wage/apprenticeship rules are met or if construction began before January 29, 2023. Include IRS registration numbers and perjury declarations.
- Recapture Events: Use Schedule D to report if leaked CO exceeds injected amounts during the recapture period.
- Pre-Filing Registration: Required for elective payments or transfers under Sections 6417 or 6418.
- Lifecycle Analysis for Utilization: Follow Notice 2024-60 for IRS/DOE approval before claiming credits.
Stay informed by checking IRS publications for any 2026 adjustments, especially regarding foreign entity restrictions.
Why EOR Certification Matters for Your Business?
Certifying your EOR project with Schedule C not only unlocks valuable tax credits but also demonstrates commitment to sustainable energy practices. By integrating carbon capture into oil recovery, operators can reduce emissions, comply with EPA regulations, and contribute to national climate goals. If you’re involved in enhanced oil recovery, consulting a tax advisor is recommended to maximize benefits and ensure accurate filing.
For more details on related forms, visit the IRS website or explore resources on carbon sequestration credits. This certification process, while detailed, supports innovation in the energy sector—empowering operators to thrive in a greener economy.