Internal Revenue Code · 26 U.S.C.
§ 43. Enhanced oil recovery credit
Official text, no changes From the Office of the Law Revision Counsel, release point 119-121 (current through Public Law 119-121 (October 9, 2026)). Compare it with the official text at uscode.house.gov (external site).
Cite as 26 U.S.C. § 43
At a glance
Read from the text, the source credit and the official notes. Not part of the law.
- Status
- In force
- Added
- November 5, 1990 by Pub. L. 101–508
- Last amended
- December 21, 2005 by Pub. L. 109–135
- Amendments
- 4 dated changes in the source credit
- Length
- 5 subsections · 1,139 words · about 5 min to read
- Defines
- 7 terms
- Cross-references
- cites 8; cited by 5 Code sections and 5 other regulations
- Regulations
- 7 issued under this section
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.
For purposes of this subsection, the term “reference price” means, with respect to any calendar year, the reference price determined for such calendar year under section 45K(d)(2)(C).
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. For purposes of the preceding sentence, the term “GNP implicit price deflator” means the first revision of the implicit price deflator for the gross national product as computed and published by the Secretary of Commerce. Not later than April 1 of any calendar year, the Secretary shall publish the inflation adjustment factor for the preceding calendar year.
A project shall not be treated as a qualified enhanced oil recovery project unless the operator submits to the Secretary (at such times and in such manner as the Secretary provides) a certification from a petroleum engineer that the project meets (and continues to meet) the requirements of subparagraph (A).
For purposes of determining qualified enhanced oil recovery costs, rules similar to the rules of section 49(a)(1), section 49(a)(2), and section 49(b) shall apply.
For purposes of this section, immiscible non-hydrocarbon gas displacement shall be treated as a tertiary recovery method under section 193(b)(3).
For purposes of this subtitle, if a credit is determined under this section for any expenditure with respect to any property, the increase in the basis of such property which would (but for this subsection) result from such expenditure shall be reduced by the amount of the credit so allowed.
An election under paragraph (1) for any taxable year may be made (or revoked) at any time before the expiration of the 3-year period beginning on the last date prescribed by law for filing the return for such taxable year (determined without regard to extensions).
An election under paragraph (1) (or revocation thereof) shall be made in such manner as the Secretary may by regulations prescribe.
(Added Pub. L. 101–508, title XI, § 11511(a), Nov. 5, 1990, 104 Stat. 1388–483; amended Pub. L. 106–554, § 1(a)(7) [title III, § 317(a)], Dec. 21, 2000, 114 Stat. 2763, 2763A–645; Pub. L. 108–357, title VII, § 707(a), (b), Oct. 22, 2004, 118 Stat. 1550; Pub. L. 109–58, title XIII, § 1322(a)(3)(B), Aug. 8, 2005, 119 Stat. 1011; Pub. L. 109–135, title IV, § 412(i), Dec. 21, 2005, 119 Stat. 2637.)
Terms defined here
Where the text says “the term … means”. Select a term to jump to its definition.
Regulations under this section
Treasury regulations (26 CFR) issued under § 43
Cross-references
Computed from the citations in the text of Title 26 and 26 CFR.
This section cites 8 other sections
- § 38 General business credit
- § 45K(d)(2)(C) Credit for producing fuel from a nonconventional source
- § 263(c) Capital expenditures
- § 193(b) Tertiary injectants
- § 638(1) Continental shelf areas
- § 49(a)(1) At-risk rules
- § 168(i)(16) Accelerated cost recovery system
- § 613A(e)(2) Limitations on percentage depletion in case of oil and gas wells
Cited by 5 Code sections
- § 38(b)(6) General business credit
- § 45I(b)(2)(B) Credit for producing oil and gas from marginal wells
- § 45K(b)(5)(A) Credit for producing fuel from a nonconventional source
- § 45Q(b)(1)(A)(ii) Credit for carbon oxide sequestration
- § 196(c)(5) Deduction for certain unused business credits
Cited in 5 regulations not issued under it
- § 1.45Q-1 Credit for Carbon Oxide Sequestration.
- § 1.45Q-2 Definitions for Purposes of §§ 1.45Q-1 through 1.45Q-5.
- § 1.6014-2 Tax not computed by taxpayer for taxable years beginning after December 31, 1969.
- § 31.3507-1 Advance payments of earned income credit.
- § 31.3507-2 Earned income credit advance payment certificates.
Amendment history
From the source credit and the official notes, newest first.
Where it sits in the Code
- Subtitle A Income Taxes
- Chapter 1 NORMAL TAXES AND SURTAXES
- Subchapter A Determination of Tax Liability
- Part IV CREDITS AGAINST TAX
- Subpart D Business Related Credits
Nearby sections
- § 40A Biodiesel and renewable diesel used as fuel
- § 40B Sustainable aviation fuel credit
- § 41 Credit for increasing research activities
- § 42 Low-income housing credit
- § 43 Enhanced oil recovery credit
- § 44 Expenditures to provide access to disabled individuals
- § 44A Renumbered
- § 44B Repealed
- § 44C Renumbered
Official notes
Show the Law Revision Counsel's notes (amendments, effective dates)
Inflation Adjusted Items for Certain Tax Years
For inflation adjustment of certain items in this section, see Internal Revenue Notices listed in a table below.
Editorial Notes
Prior Provisions
A prior section 43 was renumbered section 32 of this title.
Another prior section 43 was renumbered section 37 of this title.
Amendments
2005—Subsec. (b)(2). Pub. L. 109–58 substituted “section 45K(d)(2)(C)” for “section 29(d)(2)(C)”.
Subsec. (c)(5). Pub. L. 109–135 reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “For purposes of paragraph (1)(D)—
“(1) In general.—The term ‘Alaska natural gas’ means natural gas entering the Alaska natural gas pipeline (as defined in section 168(i)(16) (determined without regard to subparagraph (B) thereof)) which is produced from a well—
“(A) located in the area of the State of Alaska lying north of 64 degrees North latitude, determined by excluding the area of the Alaska National Wildlife Refuge (including the continental shelf thereof within the meaning of section 638(1)), and
“(B) pursuant to the applicable State and Federal pollution prevention, control, and permit requirements from such area (including the continental shelf thereof within the meaning of section 638(1)).
“(2) Natural gas.—The term ‘natural gas’ has the meaning given such term by section 613A(e)(2).”
2004—Subsec. (c)(1)(D). Pub. L. 108–357, § 707(a), added subpar. (D).
Subsec. (c)(5). Pub. L. 108–357, § 707(b), added par. (5).
2000—Subsec. (c)(1)(C). Pub. L. 106–554 inserted “(as defined in section 193(b))” after “expenses” and struck out “under section 193” after “allowable”.
Statutory Notes and Related Subsidiaries
Effective Date of 2005 Amendment
Amendment by Pub. L. 109–58 applicable to credits determined under the Internal Revenue Code of 1986 for taxable years ending after Dec. 31, 2005, see section 1322(c)(1) of Pub. L. 109–58, set out as a note under section 45K of this title.
Effective Date of 2004 Amendment
Pub. L. 108–357, title VII, § 707(c), Oct. 22, 2004, 118 Stat. 1550, provided that: “The amendment made by this section [amending this section] shall apply to costs paid or incurred in taxable years beginning after December 31, 2004.”
Effective Date of 2000 Amendment
Pub. L. 106–554, § 1(a)(7) [title III, § 317(b)], Dec. 21, 2000, 114 Stat. 2763, 2763A–645, provided that: “The amendment made by this section [amending this section] shall take effect as if included in section 11511 of the Revenue Reconciliation Act of 1990 [Pub. L. 101–508].”
Effective Date
Pub. L. 101–508, title XI, § 11511(d), Nov. 5, 1990, 104 Stat. 1388–485, provided that:
“(1) In general.— The amendments made by this section [enacting this section and amending sections 38, 39, 196, and 6501 of this title] shall apply to costs paid or incurred in taxable years beginning after December 31, 1990.“(2) Special rule for significant expansion of projects.— For purposes of section 43(c)(2)(A)(iii) of the Internal Revenue Code of 1986 (as added by subsection (a)), any significant expansion after December 31, 1990, of a project begun before January 1, 1991, shall be treated as a project with respect to which the first injection commences after December 31, 1990.”
Executive Documents
Inflation Adjusted Items for Certain Years
Provisions relating to inflation adjustment of items in this section for certain years were contained in the following:
2026—Internal Revenue Notice 2026–46.
2025—Internal Revenue Notice 2025–32.
2024—Internal Revenue Notice 2024–61.
2023—Internal Revenue Notice 2023–57.
2022—Internal Revenue Notice 2022–19.
2021—Internal Revenue Notice 2021–47.
2020—Internal Revenue Notice 2020–31.
2019—Internal Revenue Notice 2019–36.
2018—Internal Revenue Notice 2018–49.
2017—Internal Revenue Notice 2017–25.
2016—Internal Revenue Notice 2016–44.
2015—Internal Revenue Notice 2015–64.
2014—Internal Revenue Notice 2014–64.
2013—Internal Revenue Notice 2013–50.
2012—Internal Revenue Notice 2012–49.
2011—Internal Revenue Notice 2011–57.
2010—Internal Revenue Notice 2010–72.
2009—Internal Revenue Notice 2009–73.
2008—Internal Revenue Notice 2008–72.
2007—Internal Revenue Notice 2007–64.
2006—Internal Revenue Notice 2006–62.
2005—Internal Revenue Notice 2005–56.
2004—Internal Revenue Notice 2004–49.
2003—Internal Revenue Notice 2003–43.
2002—Internal Revenue Notice 2002–53.
2001—Internal Revenue Notice 2001–54.
2000—Internal Revenue Notice 2000–51.
1999—Internal Revenue Notice 99–45.
1998—Internal Revenue Notice 98–41.
1997—Internal Revenue Notice 97–39.
1996—Internal Revenue Notice 96–41.