skip navigation

Search Help
Navigation Help

Topic Index
ABCDEFGHI
JKLMNOPQR
STUVWXYZ#

International
Tax Topic Index

Affordable Care Act
Tax Topic Index

FAQs
Forms
Publications
Tax Topics

Comments
About Tax Map

IRS.gov Website
Current Year Tax Map
Publication 510
taxmap/pubs/p510-023.htm#en_us_publink1000302016

Biodiesel or Renewable Diesel Mixture Credit, Alternative Fuel Credit, and Alternative Fuel Mixture Credit(p20)

rule
EIC
For alternative fuel mixtures produced after December 31, 2011, see How to Claim the Credit below.
The section 6426 credit for biodiesel and alternative fuel consists of the biodiesel or renewable diesel mixture credit, alternative fuel credit, and alternative fuel mixture credit.
taxmap/pubs/p510-023.htm#en_us_publink1000302018

Biodiesel or renewable diesel mixture credit claimant.(p20)

rule
Claimant produced a biodiesel mixture by mixing biodiesel with diesel fuel. Claimant produced a renewable diesel mixture by mixing renewable diesel with liquid fuel (other than renewable diesel).
The person that produced and sold or used the mixture in their trade or business is the only person eligible to make this claim. The credit is based on the gallons of biodiesel or renewable diesel in the mixture.
EIC
Renewable diesel does not include any fuel derived from coprocessing biomass (as defined in section 45K(c)(3)) with a feedstock that is not biomass.
taxmap/pubs/p510-023.htm#en_us_publink1000302020

Claim requirements.(p20)

rule
See the Instructions for Form 720 for the biodiesel or renewable diesel mixture claim requirements.
taxmap/pubs/p510-023.htm#en_us_publink1000302023

Alternative fuel credit claimant. (p20)

rule
For the alternative fuel credit, the registered alternative fueler who (1) sold an alternative fuel at retail delivered it into the fuel supply tank of a motor vehicle or motorboat, (2) sold an alternative fuel, delivered it in bulk taxable use in a motor vehicle or motorboat, and received required statement from the buyer, (3) used an alternative fuel (not sold at retail or in bulk as previously described) motor vehicle or motorboat, or (4) sold an alternative fuel used as a fuel in aviation is the only person eligible to make this claim.
taxmap/pubs/p510-023.htm#en_us_publink1000302028

Carbon capture requirement.(p20)

rule
A credit for Fischer-Tropsch process liquid fuel derived from coal (including peat) can be claimed only if the fuel is derived from coal produced at a gasification facility that separates and sequesters at least 75% of the facility's total carbon dioxide emissions.
taxmap/pubs/p510-023.htm#en_us_publink1000274190

Alternative fuel credit.(p20)

rule
The registered alternative fueler is the person eligible to make the claim. An alternative fueler is the person liable for tax on alternative fuel under the rules for taxable events for Other Fuels (discussed in chapter 1) or would be liable but for an exemption for nontaxable uses. An alternative fueler includes a person who sells for use or uses an alternative fuel in aviation.
taxmap/pubs/p510-023.htm#en_us_publink1000302027

Alternative fuel mixture credit claimant.(p20)

rule
For the alternative fuel mixture credit, the registered alternative fueler that produced and sold or used the mixture as a fuel in their trade or business is the only person eligible to make this claim. The credit is based on the gallons of alternative fuel in the mixture. An alternative fuel mixture is a mixture of alternative fuel and section 4081 taxable fuel (gasoline, diesel fuel, or kerosene).
taxmap/pubs/p510-023.htm#en_us_publink1000274279

Registration.(p20)

rule
You must be registered by the IRS to be eligible to claim the section 6426 fuel credit. See Registration Requirements in chapter 1.
taxmap/pubs/p510-023.htm#en_us_publink1000274280

Credits for fuel provide incentive for United States production.(p20)

rule
The section 6426 fuel credit may not be claimed for alternative fuel that is produced outside the United States for use as a fuel outside the United States. The United States includes any possession of the United States.
taxmap/pubs/p510-023.htm#en_us_publink1000274282

Credit for fuels derived from paper or pulp production. (p20)

rule
Credit for alternative fuels and alternative fuel mixtures for any fuel derived from the production of paper or pulp are not available for fuel sold or used on or after December 31, 2009.
taxmap/pubs/p510-023.htm#en_us_publink1000302032

How to Claim the Credit(p20)

rule
Any biodiesel or renewable diesel mixture credit must first be claimed on Schedule C to reduce your taxable fuel liability reported on Form 720. Any excess credit may be claimed on Schedule C (Form 720), Schedule 3 (Form 8849), Form 4136, or Form 8864, Biodiesel and Renewable Diesel Fuels Credit. See Notice 2005-4 and the Instructions for Form 720 for more information. Also see Notice 2013-26 on page 984 of I.R.B. 2013-18 at www.irs.gov/pub/irs-irbs/irb13-18.pdf; and see chapter 2, later.
taxmap/pubs/p510-023.htm#en_us_publink1000302033

Coordination with income tax credit.(p20)

rule
Only one credit may be taken for any amount of biodiesel or renewable diesel. If any amount is claimed (or will be claimed) for any amount of biodiesel or renewable diesel on Form 720, Form 8849, or Form 4136, then a claim cannot be made on Form 8864 for that amount of biodiesel or renewable diesel.
Any alternative fuel credit must first be claimed on Schedule C (Form 720) to reduce your section 4041 taxable fuel liability for alternative fuel and CNG reported on Form 720. Any excess credit may claimed on Schedule C (Form 720), Schedule 3 (Form 8849), or Form 4136.
For alternative fuel mixtures produced after December 31, 2011, the alternative fuel mixture credit can be claimed on Schedule C (Form 720), not on Form 4136 or Schedule 3 (Form 8849), and only to the extent of your section 4081 taxable fuel liability for gasoline, diesel fuel and kerosene reported on Form 720.
Calculate the limitation for alternative fuel mixtures separately and enter on Schedule C (Form 720), line 14, only the gallons of mixtures that do not exceed your section 4081 taxable fuel liability.