IRS Publishes Oil Recovery Credit Inflation Adjustment Factors
Notice 2024-61; 2024-34 IRB 520
- Institutional AuthorsInternal Revenue Service
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- Tax Analysts Document Number2024-23729
- Tax Analysts Electronic Citation2024 TNTF 159-50
2024 Section 43 Inflation Adjustment
Section 43(a) of the Internal Revenue Code provides that for purposes of section 38, the enhanced oil recovery credit for any taxable year is an amount equal to 15 percent of the taxpayer's qualified enhanced oil recovery costs for such taxable year.
Section 43(b)(1) provides that the amount of the credit determined under subsection (a) for any taxable year shall be reduced by an amount which bears the same ratio to the amount of such credit (determined without regard to this paragraph) as — (A) the amount by which the reference price for the calendar year preceding the calendar year in which the taxable years begins exceeds $28, bears to (B) $6.
Section 43(b)(3)(B) requires the Secretary to publish an inflation adjustment factor. The enhanced oil recovery credit under §43 for any taxable year is reduced if the “reference price,” determined under §45K(d)(2)(C), for the calendar year preceding the calendar year in which the taxable year begins is greater than $28 multiplied by the inflation adjustment factor the current calendar year.
The term “inflation adjustment factor” means, with respect to any calendar year, a fraction the numerator of which is the GNP implicit price deflator for the preceding calendar year and the denominator of which is the GNP implicit price deflator for 1990.
Because the reference price for the 2023 calendar year ($76.10) exceeds $28 multiplied by the inflation adjustment factor for the 2024 calendar year ($28 multiplied by 2.0615 = $57.72) by $18.38, the enhanced oil recovery credit for qualified costs paid or incurred in 2024 is phased out completely.
Table 1 contains the GNP implicit price deflator used for the 2023 calendar year, as well as the previously published GNP implicit price deflators used for the 1991 through 2022 calendar years.
Calendar Year | GNP Implicit Price Deflator |
|---|---|
1990 | 112.9 (used for 1991) |
1991 | 117.0 (used for 1992) |
1992 | 120.9 (used for 1993) |
1993 | 124.1 (used for 1994) |
1994 | 126.0 (used for 1995)* |
1995 | 107.5 (used for 1996) |
1996 | 109.7 (used for 1997)** |
1997 | 112.35 (used for 1998) |
1998 | 112.64 (used for 1999)*** |
1999 | 104.59 (used for 2000) |
2000 | 106.89 (used for 2001) |
2001 | 109.31 (used for 2002) |
2002 | 110.63 (used for 2003) |
2003 | 105.67 (used for 2004)**** |
2004 | 108.23 (used for 2005) |
2005 | 112.129 (used for 2006) |
2006 | 116.036 (used for 2007) |
2007 | 119.656 (used for 2008) |
2008 | 122.407 (used for 2009) |
2009 | 109.764 (used for 2010)***** |
2010 | 110.654 (used for 2011) |
2011 | 113.347 (used for 2012)****** |
2012 | 115.387 (used for 2013) |
2013 | 106.710 (used for 2014)******* |
2014 | 108.407 (used for 2015)******** |
2015 | 109.868 (used for 2016) |
2016 | 111.528 (used for 2017) |
2017 | 113.500 (used for 2018) |
2018 | 110.308 (used for 2019)********* |
2019 | 112.257 (used for 2020) |
2020 | 113.586 (used for 2021) |
2021 | 118.586 (used for 2022)********** |
2022 | 127.194 (used for 2023) |
2023 | 122.179 (used for 2024)*********** |
* Beginning in 1995, the GNP implicit price deflator was rebased relative to 1992. The 1990 GNP implicit price deflator used to compute the 1996 §43 inflation adjustment factor is 93.6. ** Beginning in 1997, two digits follow the decimal point in the GNP implicit price deflator. The 1990 GNP price deflator used to compute the 1998 §43 inflation adjustment factor is 93.63. *** Beginning in 1999, the GNP implicit price deflator was rebased relative to 1996. The 1990 GNP implicit price deflator used to compute the 2000 §43 inflation adjustment factor is 86.53. **** Beginning in 2003, the GNP implicit price deflator was rebased, and the 1990 GNP implicit price deflator used to compute the 2004 §43 inflation adjustment factor is 81.589. ***** Beginning in 2009, the GNP implicit price deflator was rebased, and the 1990 GNP implicit price deflator used to compute the 2010 §43 inflation adjustment factor is 72.199. ****** Beginning in 2011, the 1990 GNP implicit price deflator used to compute the 2012 §43 inflation adjustment factor is 72.260. ******* Beginning in 2013, the GNP implicit price deflator was rebased, and the 1990 GNP implicit price deflator used to compute the 2014 §43 inflation adjustment factor is 66.803. ******** Beginning in 2014, the 1990 GNP implicit price deflator used to compute the 2015 §43 inflation adjustment factor is 66.732. ********* Beginning in 2018, the 1990 GNP implicit price deflator used to compute the 2019 §43 inflation adjustment factor is 63.637. ********** Beginning in 2021, the 1990 GNP implicit price deflator used to compute the 2022 §43 inflation adjustment factor is 63.604. *********** Beginning in 2023, the 1990 GNP implicit price deflator used to compute the 2024 §43 inflation adjustment factor is 59.266. | |
Table 2 contains the inflation adjustment factor and the phase-out amount for taxable years beginning in the 2024 calendar year as well as the previously published inflation adjustment factors and phase-out amounts for taxable years beginning in the 1991 through 2023 calendar years.
Calendar Year | Inflation Adjustment Factor | Phase-out Amount |
|---|---|---|
1991 | 1.0000 | 0 |
1992 | 1.0363 | 0 |
1993 | 1.0708 | 0 |
1994 | 1.0992 | 0 |
1995 | 1.1160 | 0 |
1996 | 1.1485 | 0 |
1997 | 1.1720 | 0 |
1998 | 1.1999 | 0 |
1999 | 1.2030 | 0 |
2000 | 1.2087 | 0 |
2001 | 1.2353 | 0 |
2002 | 1.2633 | 0 |
2003 | 1.2785 | 0 |
2004 | 1.2952 | 0 |
2005 | 1.3266 | 0 |
2006 | 1.3743 | 100 percent |
2007 | 1.4222 | 100 percent |
2008 | 1.4666 | 100 percent |
2009 | 1.5003 | 100 percent |
2010 | 1.5203 | 100 percent |
2011 | 1.5326 | 100 percent |
2012 | 1.5686 | 100 percent |
2013 | 1.5968 | 100 percent |
2014 | 1.5974 | 100 percent |
2015 | 1.6245 | 100 percent |
2016 | 1.6464 | 0 |
2017 | 1.6713 | 0 |
2018 | 1.7008 | 1.069 percent |
2019 | 1.7334 | 100 percent |
2020 | 1.7640 | 100 percent |
2021 | 1.7849 | 0 |
2022 | 1.8607 | 100 percent |
2023 | 1.9998 | 100 percent |
2024 | 2.0615 | 100 percent |
DRAFTING INFORMATION
The principal author of this notice is Whitney Brady of the Office of Associate Chief Counsel (Passthroughs and Special Industries). For further information regarding this notice, contact Ms. Brady at (202) 317-6853 (not a toll-free number).
- Institutional AuthorsInternal Revenue Service
- Code Sections
- Subject Areas/Tax Topics
- Jurisdictions
- Tax Analysts Document Number2024-23729
- Tax Analysts Electronic Citation2024 TNTF 159-50
