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IRS.gov Website
Publication 510
taxmap/pubs/p510-024.htm#en_us_201307_publink1000273841

Alcohol Fuel Credit (Cellulosic Biofuel Producer Credit, only)(p19)

rule
EIC
The alcohol fuel credit consisted of the alcohol credit, alcohol fuel mixture credit, small ethanol producer credit, and cellulosic biofuel producer credit. All, except for the cellulosic biofuel producer credit, expired on December 31, 2011. The cellulosic biofuel producer credit expires on December 31, 2012.
taxmap/pubs/p510-024.htm#en_us_201307_publink1000274857

Cellulosic biofuel producer credit.(p19)

rule
You can claim a credit for each gallon of qualified cellulosic biofuel production if you are registered by the IRS as a cellulosic biofuel producer. Cellulosic biofuel is defined in chapter 1
taxmap/pubs/p510-024.htm#en_us_201307_publink1000273835

Qualified cellulosic biofuel production.(p19)

rule
Your qualified cellulosic biofuel production is any cellulosic biofuel you produce and sell for use during the tax year to another person for any of the following purposes.
Qualified production also includes your use or sale of cellulosic biofuel for these purposes. Qualified production does not include any alcohol bought by a producer who then increases the proof of the alcohol by additional distillation.
taxmap/pubs/p510-024.htm#en_us_201307_publink1000278991

Cooperative election to allocate the cellulosic biofuel producer credit to patrons.(p20)

rule
A cooperative described in section 1381(a) can elect to allocate any part of the cellulosic biofuel producer credit to patrons of the cooperative. The credit is allocated among the patrons on the basis of the quantity or value of business done with or for the patrons for the tax year. For more information, see Form 6478.
taxmap/pubs/p510-024.htm#en_us_201307_publink1000278992

Failure to use for qualifying purposes.(p20)

rule
If the credit is applied to a cellulosic biofuel producer and you do not use the cellulosic biofuel for a purpose listed under Qualified cellulosic biofuel production, you must pay a tax equal to the credit. Report this tax on Form 720.
taxmap/pubs/p510-024.htm#en_us_201307_publink1000278993

Credit for fuel limited to United States production.(p20)

rule
The credit is not allowed for cellulosic biofuel unless the cellulosic biofuel is produced in the United States and used as a fuel in the United States. The United States includes any possession of the United States.
taxmap/pubs/p510-024.htm#en_us_201307_publink1000278994

Credit not available for some cellulosic biofuels sold or used after December 31, 2009.(p20)

rule
The credit is not available for fuel sold or used after December 31, 2009, if more than 4% of the fuel (determined by weight) is any combination of water and sediment, if the ash content of the fuel is more than 1%, or the fuel has an acid number greater than 25.
taxmap/pubs/p510-024.htm#en_us_201307_publink1000278995

How to claim the credit.(p20)

rule
You claim the credit by completing Form 6478. All individuals and corporations taking the credit use Form 6478. Partnerships (including electing large partnerships), corporations, estates, and trusts figure the credit on Form 6478 but divide the credit among their partners, shareholders, or beneficiaries.
If you claim the credit, you must include the credit for the tax year in your gross income for that year.
Form 6478 is the only form on which you can claim the cellulosic biofuel producer credit.