You may be able to claim a credit or refund of the excise tax on fuels you use for nontaxable uses. The basic rules for claiming credits and refunds are listed in Table 14-2.
Table 14-2. Claiming a Credit or Refund of Excise Taxes
This table gives the basic rules for claiming a credit or refund of excise taxes on fuels used for a nontaxable use.
|Which form to use||Form 4136, Credit for Federal Tax Paid on Fuels||Form 8849, Claim for Refund of Excise Taxes, and Schedule 1 (Form 8849)|
|Type of form||Annual||Quarterly|
|When to file||With your income tax return||By the last day of the quarter following the last quarter included in the claim|
|Amount of tax||Any amount||$750 or more1|
|1You may carry over an amount less than $750 to the next quarter. |
Keep at your principal place of business all records needed to enable the IRS to verify that you are the person entitled to claim a credit or refund and the amount you claimed. You do not have to use any special form, but the records should establish the following information.
- The total number of gallons bought and used during the period covered by your claim.
- The dates of the purchases.
- The names and addresses of suppliers and amounts bought from each during the period covered by your claim.
- The nontaxable use for which you used the fuel.
- The number of gallons used for each nontaxable use.
It is important that your records separately show the number of gallons used for each nontaxable use that qualifies as a claim. For more information about recordkeeping, see Publication 583, Starting a Business and Keeping Records.
A credit is an amount that reduces the tax on your income tax return when you file it at the end of the year. If you meet certain requirements, you may claim a refund during the year instead of waiting until you file your tax return.taxmap/pubs/p225-067.htm#en_us_publink100073217
You can claim the following taxes only as a credit.
- Tax on gasoline and aviation gasoline you used on a farm for farming purposes.
- Tax on fuels (including undyed diesel fuel or undyed kerosene) you used for nontaxable uses if the total for the tax year is less than $750.
- Tax on fuel you did not include in any claim for refund previously filed for any quarter of the tax year.
You make a claim for a fuel tax credit on Form 4136 and attach it to your income tax return. Do not claim a credit for any excise tax for which you have filed a refund claim.taxmap/pubs/p225-067.htm#en_us_publink100073219
How you claim a credit depends on whether you are an individual, partnership, corporation, S corporation, trust, or farmers' cooperative association.taxmap/pubs/p225-067.htm#en_us_publink100073220
You claim the credit on the "Credits from" line of your Form 1040. Check box b. If you would not otherwise have to file an income tax return, you must do so to get a fuel tax credit.taxmap/pubs/p225-067.htm#en_us_publink100073221
Partnerships (other than electing large partnerships) claim the credit by including a statement on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc., showing each partner's share of the number of gallons of each fuel sold or used for a nontaxable use, the type of use, and the applicable credit per gallon. Each partner claims the credit on his or her income tax return for the partner's share of the fuel used by the
An electing large partnership can claim the credit on the "Other payments" line of Form 1065-B, U.S. Return of Income for Electing Large Partnerships. taxmap/pubs/p225-067.htm#en_us_publink100073222
Corporations, S corporations, farmers' cooperative associations, and trusts make the claim on the appropriate line of their income tax return.taxmap/pubs/p225-067.htm#en_us_publink100073223
You can claim a fuel tax credit on your income tax return for the year you used the fuel.
You may be able to make a fuel tax claim on an amended income tax return for the year you used the fuel. Generally, you must file an amended return by the later of 3 years from the date you filed your original return or within 2 years from the date you paid the income tax.
You make a claim for refund of the excise tax on fuel on Form 8849.
Do not claim a refund on Form 8849 for any excise tax for which you have filed or will file a claim on Schedule C (Form 720) or Form 4136.
You may file a claim for refund for any quarter of your tax year for which you can claim $750 or more. This amount is the excise tax on all fuels used for a nontaxable use during that quarter or any prior quarter (for which no other claim has been filed) during the tax year.
If you cannot claim at least $750 at the end of a quarter, you carry the amount over to the next quarter of your tax year to determine if you can claim at least $750 for that quarter. If you cannot claim at least $750 at the end of the fourth quarter of your tax year, you must claim a credit on your income tax return using Form 4136. Only one claim can be filed for a quarter.
You cannot claim a refund for excise tax on gasoline and aviation gasoline used on a farm for farming purposes. You must claim a credit on your income tax return for the tax.
File the claim for refund by filling out Schedule 1 (Form 8849) and attaching it to Form 8849. Send it to the address shown in the instructions. If you file Form 720, you can use the Schedule C portion of Form 720 for your refund claims. See the Instructions for Form 720.taxmap/pubs/p225-067.htm#en_us_publink100073228
You must file a quarterly claim by the last day of the first quarter following the last quarter included in the claim. If you do not file a timely refund claim for the fourth quarter of your tax year, you will have to claim a credit for that amount on your income tax return, as discussed earlier.