Renewable Diesel Credits(p22)

Generally, the rules for the renewable diesel credit and the renewable diesel mixture credit are the same as the biodiesel credit (defined earlier) and the biodiesel mixture credit (defined earlier). However, the small agri-biodiesel credit does not apply to renewable diesel.

For purposes of the renewable diesel credit or renewable diesel mixture credit, renewable diesel means liquid fuel derived from biomass that meets the registration requirements for fuels and fuel additives established by the EPA under section 211 of the Clean Air Act and the requirements of ASTM D975, D396, or other equivalent standard approved by the IRS.

Renewable diesel includes fuel derived from biomass that meets the requirements of a Department of Defense specification for military jet fuel or an ASTM specification for aviation turbine fuel. In these cases, kerosene can be treated as diesel fuel.

Renewable diesel does not include any fuel derived from coprocessing biomass with a feedstock that is not biomass (as defined in Internal Revenue Code section 45K(c)(3)).

Renewable diesel mixture means a mixture of renewable diesel and diesel fuel (other than renewable diesel) that contains at least 0.1% (by volume) of diesel fuel (other than renewable diesel). The diesel fuel in a renewable diesel mixture may be either dyed or undyed.

You must be registered by the IRS if you produce or import renewable diesel. See Registration Requirements in chapter 1.

The renewable diesel mixture credit must first be taken on Schedule C to reduce your taxable fuel liability for gasoline, diesel fuel, and kerosene reported on Form 720. Any excess credit may be taken on Schedule C (Form 720), Schedule 3 (Form 8849), or Form 4136.

You take the renewable diesel credit by completing Form 8864. All individuals and corporations taking the credit use Form 8864. Partnerships (including electing large partnerships), S corporations, estates, and trusts figure the credit on Form 8864 but divide the credit among their partners, shareholders, or beneficiaries.

If you take the renewable diesel credit, you must include the credit for the tax year in your gross income for that year.

Form 8864 is the only form on which you can claim the renewable diesel credit.