Schedule B (Form 8933) Guide: Disposal Site Certification

Introduction – What Is Form 8933 (Schedule B)?

Schedule B (Form 8933), titled Disposal Operator Certification, is an official federal tax schedule governed by the Internal Revenue Service (IRS) and the U.S. Department of the Treasury. It functions as an integral attachment to Form 8933, the main form used to calculate the Section 45Q Carbon Oxide Sequestration Credit.

While Schedule A is completed by the property owners of a disposal facility, Schedule B is reserved specifically for the operator of a dedicated geological disposal site. It certifies that the physical injection of carbon oxide occurred in accordance with federal environmental standards and provides the operational baseline needed to support Section 45Q tax credit claims.

Purpose of the Form – Why Does Schedule B (Form 8933) Exist?

Under Section 45Q of the Internal Revenue Code, taxpayers can earn valuable tax credits only if captured carbon oxide is placed into verified “secure geological storage.” Congress and the IRS require transparent, audited proof that injected carbon remains safely sequestered underground rather than venting into the atmosphere.

Schedule B solves this verification challenge by placing legal reporting responsibility on the site operator. As the entity managing wellhead operations and pressure gauges, the operator uses Schedule B to certify injection volumes, tie those numbers to Environmental Protection Agency (EPA) greenhouse gas filings, and document the specific ownership interests of everyone participating in the storage reservoir.

Who Needs to File This Form?

You must file Schedule B (Form 8933) if your company acts as the operator (or designated operating company) of a secure geological disposal facility where captured qualified carbon oxide was injected during the tax year. In addition to filing the schedule with your own return, federal tax rules impose a key administrative requirement:

• Furnishing Copies to Owners: You must provide a completed copy of your Schedule B to each owner of the disposal site project. The owners rely on the exact numbers certified in your Schedule B to complete their own Schedule A filings.
• Multi-Owner Projects: If a disposal site is owned by multiple partners or corporate entities, the operator completes one centralized certification that details the relative operating interest of every owner.

Who Is Exempt / Not Required to File?

Not every business involved in the carbon economy is required or permitted to file Schedule B. You should not file this schedule if:

• Enhanced Oil or Gas Recovery (EOR) Sites: You operate an oil or natural gas reservoir where carbon is injected as a tertiary injectant to stimulate production. EOR operations must file Schedule C (Form 8933) instead.
• Site Owners Without Operating Duties: You own an equity or royalty interest in a geological storage site but do not manage physical operations. Non-operating owners file Schedule A, not Schedule B.
• Commercial Utilization Facilities: You fix carbon into commercial products like concrete, chemicals, or plastics without underground injection. Utilization activities are reported on Schedule F.
• Carbon Capture Suppliers: You capture carbon at an industrial plant or direct air capture facility but hand custody over to a third-party disposal firm at the facility boundary.

When to File Schedule B (Form 8933)

Schedule B is an annual compliance document that must be submitted for each tax year in which carbon oxide is actively injected into the geological formation. It is filed directly alongside parent Form 8933 with your federal income tax return.

The filing deadlines match your business tax return deadlines, including approved extensions:

• Partnerships and S Corporations (Form 1065 & Form 1120-S): Typically March 15 (or September 15 with an extension).
• C Corporations (Form 1120): Typically April 15 (or October 15 with an extension).

Because site owners must attach their own forms based on your certified figures, operators must furnish copies of Schedule B to all project owners well in advance of their respective tax deadlines.

Where and How to File

Schedule B (Form 8933) cannot be filed as an independent, standalone form. It must be attached to Form 8933 and submitted as part of the operating entity’s annual business tax return.

Most operators submit Schedule B electronically through approved corporate tax software. If submitting a paper tax return, attach Schedule B directly behind Form 8933 and mail the complete filing package to the IRS address as per instructions for your specific income tax return type.

Step-by-Step Instructions to Fill Schedule B (Form 8933)

Schedule B requires thorough coordination between your operational field logs, EPA filings, and commercial contracts. The form is structured into three main parts.

Header Information

Enter the legal name and identifying tax number (Employer Identification Number or EIN) of the operating company as reported on the primary tax return.

Part-by-Part Breakdown

Part & Lines	Section Title	Required Information
Part I (Line 1)	Information About the Owner(s)	List each legal owner of the disposal site during the tax year, including their full name, address, EIN, and exact percentage of operating interest in the project.
Part II (Lines 2–4)	Geological Disposal Site Details	State the site name, geographic location (county, state, or offshore tract), and operator EIN. Identify any secondary entities named as operators for state or environmental regulatory purposes.
Part II (Lines 5–8)	Regulatory & EPA Certification	Enter the IRS facility registration number and EPA e-GGRT facility ID. Enter the injection start date (MM/YYYY). Check the box confirming figures match EPA Subpart RR filings, and provide an approved MRV plan copy or official EPA URL.
Part III (Line 9)	Supplier Identification	List every capture facility that supplied carbon oxide during the year. Include each supplier’s name, EIN, capture facility location, IRS registration number, and EPA e-GGRT ID.
Part III (Line 10)	Disposal Allocation Matrix	Break down the exact metric tons of qualified carbon oxide received from each supplier and securely stored on behalf of each site owner during the calendar year.

Required Documents and Information Needed Before Filling

Before completing Schedule B, ensure that your technical, legal, and environmental teams have assembled the following core documents:

• EPA-Approved MRV Plan: An active Monitoring, Reporting, and Verification (MRV) plan approved by the Environmental Protection Agency under 40 CFR Part 98, Subpart RR.
• EPA Greenhouse Gas Reports: Copies of official annual injection reports submitted through the EPA’s electronic Greenhouse Gas Reporting Tool (e-GGRT).
• IRS Pre-Filing Registrations: Valid IRS-issued registration numbers for the geological disposal facility and all connected capture facilities.
• Custody Transfer Ledgers: Calibrated flow meter data showing total metric tons received from each carbon supplier at custody transfer points.
• Operating and Joint Venture Agreements: Legal contracts establishing each project owner’s exact percentage share of storage rights.

Common Mistakes to Avoid

Errors on Schedule B can jeopardize millions of dollars in tax credits for everyone invested in your storage hub. Watch out for these frequent mistakes:

• Filing for EOR Injections: Using Schedule B for oil or gas recovery operations rather than Schedule C invalidates the certification.
• Failing to Furnish Copies to Owners: If an operator fails to supply Schedule B to site owners, those owners cannot substantiate their Schedule A filings, resulting in disallowed tax credits.
• Data Inconsistencies with the EPA: Numbers entered on Line 10 must match official EPA Subpart RR reports. Discrepancies between IRS schedules and EPA databases trigger automated audit flags.
• Missing Approved MRV Documentation: Omitting the approved MRV plan copy or failing to provide a functional EPA link on Line 8 violates Section 45Q secure storage rules.
• Unbalanced Ownership Percentages: Failing to ensure that the operating interest percentages in Part I add up to 100 percent of the project ownership.

Penalties for Non-Filing or Errors

Schedule B is a mandatory evidentiary document. Failing to file it or submitting inaccurate data leads to severe consequences across the carbon capture value chain:

• Total Credit Disallowance: The IRS will deny the Section 45Q credit for all associated taxpayers—including capture suppliers and storage owners—if the operator fails to certify secure geological storage.
• Statutory Recapture Liabilities: If the operator fails to properly verify containment or if carbon leaks are not promptly disclosed, previously claimed credits face clawback under IRS recapture rules.
• Accuracy and Negligence Penalties: Misrepresenting injection figures or falsifying regulatory compliance can lead to a 20 percent accuracy-related penalty under Section 6662, alongside substantial interest charges and possible civil environmental fines.

Related Forms and Schedules

Schedule B operates within a comprehensive family of clean energy and Section 45Q forms:

• Form 8933: Carbon Oxide Sequestration Credit (the master calculation form).
• Schedule A (Form 8933): Disposal or Enhanced Oil Recovery Owner Certification.
• Schedule C (Form 8933): Enhanced Oil Recovery Operator Certification.
• Schedule D (Form 8933): Recapture Certification.
• Schedule E (Form 8933): Election Certification.
• Form 3800: General Business Credit.
• Form 1120 / Form 1065: Corporate or Partnership Income Tax Returns.

Frequently Asked Questions

Can Schedule B be used for carbon dioxide injected into active oil reservoirs?

No. Schedule B is strictly for dedicated geological storage where no oil or natural gas recovery occurs. If carbon is injected into an oil or gas field for enhanced recovery, the operator must complete Schedule C.

What is an EPA MRV plan and why is it mandatory?

An MRV (Monitoring, Reporting, and Verification) plan is an EPA-approved protocol under Subpart RR that outlines how the facility detects leaks, monitors subsurface migration, and calculates net stored carbon. The IRS requires it to legally prove permanent storage.

What happens if our disposal facility has multiple operators?

IRS instructions require the designated operator responsible for day-to-day injection and environmental compliance to complete Schedule B. Any other entities named as operators for state or local purposes must be disclosed on Line 4.

Why do project owners need a copy of my Schedule B?

Project owners file Schedule A to certify their share of stored carbon. Because the operator measures and controls the physical injection, the IRS requires owners to reconcile their Schedule A figures directly against the operator’s Schedule B.

How must injection volumes be measured?

Volumes must be measured at the wellhead using calibrated flow meters and gas chromatography conforming to EPA Subpart RR standards, then converted into metric tons rounded to the nearest hundredth.

Conclusion – Key Takeaways Summarized

Schedule B (Form 8933) is the foundational operational document for dedicated geological carbon storage under Section 45Q. It bridges federal tax incentives with strict EPA environmental standards, ensuring that carbon credits are backed by verified subsurface containment.

To ensure total compliance, operators must maintain an active EPA-approved MRV plan, accurately report all capture suppliers and facility owners, reconcile injection tonnages against EPA filings, and promptly deliver signed copies to every site owner.