The Internal Revenue Service announced June 4, 2021, in Notice 2021-34 that the Marginal Well Production Credit (MWC) for natural gas production from qualifying wells in calendar year 2020 is $0.66 per mcf (thousand cubic feet) for the first 18 mcf of daily production.
The MWC rates for prior years were 2019 production $0.08, 2018 production $0.00, 2017 production $0.51, and 2016 production of $0.14 per mcf for the first 18 mcf of daily production from a marginal well. The credits may be used to offset regular income tax but may not offset alternative minimum tax. Any unused credit in a year is carried back 5 years to obtain refunds. Any remaining unused credits are carried forward up to 20 years to offset future years income tax.