Clean Hydrogen Production Tax Credit 45V
What qualifies
A credit for the production clean hydrogen. The credit provides a varying, four-tier incentive depending on the carbon intensity of the hydrogen production pathway. Hydrogen can be produced in new or retrofitted facilities. The credit can be claimed for 10 years beginning with the date the facility is operational.
The credit measures emissions up to the point of production using the Argonne National Laboratory Greenhouse gases, Regulated Emissions, and Energy use in Technologies (GREET) Model and, more specifically, 45VH2-GREET.
Incentive value
The level of the credit provided is based on carbon intensity, up to a maximum of four kilograms of CO2-equivalent per kilogram of H2.
| Carbon Intensity (kg CO2e per kg H2) | Max Hydrogen Production Tax Credit ($/kg H2) |
|---|---|
| 4–2.5 | $0.60 |
| 2.5-1.5 | $0.75 |
| 1.5-0.45 | $1.00 |
| <0.45 | $3.00 |
Credit value increases 5-fold if prevailing wage standards and apprenticeship requirements are met.
Clean Hydrogen Production Tax Credit 45V can be used in combination with the renewable energy production tax credit and zero-emission nuclear credit. The Clean Hydrogen Production Tax Credit 45V cannot be used with the Carbon Capture and Sequestration Tax Credit 45Q at the same facility.
Tax-exempt entities can utilize direct pay.
Who is eligible
Qualified hydrogen producers, including tax-exempt entities.
When the credit is available
45V is available for projects that begin construction by 2033.
How to claim the credit
Use Form 7210 to claim the 45V Clean Hydrogen Production Credit. Preregister with the IRS and submit annual tax paperwork, typically a Form 990-T for most entities that do not normally file a tax return.
For more information on the 45V Clean Hydrogen Production Credit, click here.
Disclaimer: None of the information presented on this website should be considered official legal or financial advice. Please contact a licensed tax professional for additional information.