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Form 8830 Enhanced Oil Recovery Credit OMB No. 1545-1292
▶ 2018
Department of the Treasury Go to www.irs.gov/Form8830 for the latest information. Attachment
Internal Revenue Service (99) ▶ Attach to your tax return. Sequence No. 78
Name(s) shown on return Identifying number
1 Qualified enhanced oil recovery costs (see instructions) . . . . . . . . . . . . . 1
2 Multiply line 1 by the credit rate shown in the instructions . . . . . . . . . . . . . 2
3 Enhanced oil recovery credit from partnerships and S corporations (see instructions) . . . . 3
4 Current year credit. Add lines 2 and 3. Partnerships and S corporations, report this amount on
Schedule K. All others, report this amount on Form 3800, Part III, line 1t . . . . . . . . 4
General Instructions Definitions Qualified enhanced oil recovery
Section references are to the Internal Qualified enhanced oil recovery costs project means any project involving the
Revenue Code unless otherwise noted. means the following. application of one or more tertiary
1. Any amount paid or incurred during recovery methods defined in section 193
Future Developments the tax year for tangible property: (b)(3) (and listed below) that can
For the latest information about a. That is an integral part of a reasonably be expected to result in more
developments related to Form 8830 and qualified enhanced oil recovery project, than an insignificant increase in the
its instructions, such as legislation and amount of crude oil that will ultimately be
enacted after this form and instructions b. For which depreciation (or recovered. The project must be located
were published, go to www.irs.gov/ amortization) is allowable. within the United States, including the
Form8830. seabed and subsoil adjacent to the
2. Any intangible drilling and territorial waters of the United States
What’s New development costs: over which the United States has
The section 43 enhanced oil recovery a. That are paid or incurred in exclusive rights by international law for
credit is applicable (but at a reduced connection with a qualified enhanced oil exploration and exploitation of natural
credit rate; see Amount of Credit below) recovery project, and resources (see section 638(1)). The first
for tax years beginning in 2018 because b. For which the taxpayer may make injection of liquids, gases, or other
of the reference price per barrel of crude an election under section 263(c). For an matter must begin after 1990. However,
oil in 2017. See Notice 2018-49. integrated oil company, this includes any significant expansion after 1990 of a
Purpose of Form intangible drilling costs required to be project begun before 1991 is treated as
amortized under section 291(b). a project where the first injection begins
Use Form 8830 to claim the enhanced oil 3. Any qualified tertiary injectant after 1990.
recovery credit. This credit is part of the expenses (as defined in section 193(b)) Additionally, the operator or
general business credit. paid or incurred in connection with a designated owner must file a
An owner of an operating mineral qualified enhanced oil recovery project certification from a petroleum engineer,
interest may claim or elect not to claim for which a deduction is allowable for the who is registered or certified by a state,
this credit any time within 3 years from tax year. Qualified tertiary injectant that the project meets
the due date (excluding extensions) of its expenses includes expenditures related the above requirements. The operator or
return on either its original or an to the use of a tertiary injectant as well designated owner also must file a
amended return. Partnerships and S as expenditures related to the certification each subsequent year
corporations must file this form to claim acquisition (whether produced or indicating that the project continues to
the credit. All other taxpayers aren’t acquired by purchase) of the tertiary be implemented substantially in
required to complete or file this form if injectant. However, it doesn’t include accordance with the petroleum
the only source of this credit is a costs that would have been paid or engineer’s certification.
partnership or S corporation. Instead, incurred in the development or operation If the application of a tertiary recovery
they can report this credit directly on of a mineral property if an enhanced oil method is terminated, the operator or
Form 3800, General Business Credit, recovery project had not been designated owner must file a notice of
Part III, line 1t. implemented with respect to the project termination for the tax year when
Amount of Credit property. Costs that are related to the the project terminates.
The credit generally is 15% of qualified use of a tertiary injectant and that also Send these filings to:
costs for the tax year, but is reduced are related to other activities (for Internal Revenue Service
when the reference price per barrel of example, primary or secondary recovery) LB&I Enterprise Activities Practice
crude oil is more than the base value of must be reasonably allocated among the Area Attention: Director’s Office
$28 (as adjusted by inflation). For tax tertiary injectant and the other activities 1919 Smith Street
years beginning in 2018, there is a to determine the amount of tertiary Mail Stop 1003-HOU
reduction of the credit because the injectant expenses paid or incurred for Houston, TX 77002
reference price for the 2017 calendar the tax year. For more details, see Rev. by the due date of the operator’s or
year, $48.05, exceeds $28 multiplied by Rul. 2003-82, 2003-30 I.R.B. 125. designated owner’s federal income tax
the inflation adjustment factor (1.7008) 4. Any amount paid or incurred during return. See Regulations section 1.43-3
for the 2017 calendar year ($28 the tax year to construct an Alaska for the information required in the notice
multiplied by 1.7008 = $47.6224). natural gas plant within the meaning of and certifications.
Therefore, a portion of the credit is sections 43(c)(1)(D) and 43(c)(5). Tertiary recovery methods qualifying
phased out. Applying the section 43(b)(1) for the credit include:
reduction ratio determines the phased • Miscible fluid displacement,
out portion to be 1.069%, so the • Steam drive injection,
applicable credit rate is 13.931% • Microemulsion flooding,
(15%-1.069%). See Notice 2018-49. • In situ combustion,
For Paperwork Reduction Act Notice, see instructions. Cat. No. 13059B Form 8830 (2018)
Form 8830 (2018) Page 2
• Polymer-augmented water flooding, Line 3 The time needed to complete and file
• Cyclic-steam injection, Enter total enhanced oil recovery credits this form will vary depending on
• Alkaline (or caustic) flooding, from: individual circumstances. The estimated
• Carbonated water flooding, • Schedule K-1 (Form 1065), Partner’s burden for individual and business
• Immiscible nonhydrocarbon gas Share of Income, Deductions, Credits, taxpayers filing this form is approved
displacement, or etc., box 15 (code P); and under OMB control number 1545-0074
• Any other method approved by the • Schedule K-1 (Form 1120S), and 1545-0123 and is included in the
Secretary of the Treasury. Shareholder’s Share of Income, estimates shown in the instructions for
Deductions, Credits, etc., box 13 (code their individual and business income tax
P). return. The estimated burden for all other
Specific Instructions Partnerships and S corporations must taxpayers who file this form is shown
Figure any enhanced oil recovery credit always report the above credits on line 3. below.
from your own trade or business on lines All other taxpayers: Recordkeeping . . . 5 hr., 15 min.
1 and 2. Skip lines 1 and 2 if you’re only • Report the above credits directly on Learning about the
claiming a credit that was allocated to Form 3800, Part III, line 1t; and law or the form . . . . . . 53 min.
you from an S corporation or a • Don’t file Form 8830. Preparing and
partnership. sending the form
Line 1 Paperwork Reduction Act Notice. We to the IRS . . . . . . .1hr., 1 min.
Enter the total of the qualified costs paid ask for the information on this form to If you have comments concerning the
or incurred during the year in connection carry out the Internal Revenue laws of accuracy of these time estimates or
with a qualified enhanced oil recovery the United States. You are required to suggestions for making this form
project. See Definitions above. give us the information. We need it to simpler, we would be happy to hear from
Reduce the otherwise allowable ensure that you are complying with these you. See the instructions for the tax
deductions for line 1 costs by the line 2 laws and to allow us to figure and collect return with which this form is filed.
credit attributable to these costs. Also, if the right amount of tax.
any part of the line 1 costs are for You are not required to provide the
expenditures that increase the basis of information requested on a form that is
property, reduce the otherwise allowable subject to the Paperwork Reduction Act
basis increase by the line 2 credit unless the form displays a valid OMB
attributable to these costs. control number. Books or records
Line 2 relating to a form or its instructions must
Multiply line 1 by 13.931% (0.13931). be retained as long as their contents
may become material in the
administration of any Internal Revenue
law. Generally, tax returns and return
information are confidential, as required
by section 6103.
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