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IRS.gov Website
Publication 510
taxmap/pubs/p510-024.htm#en_us_publink1000117069

Filing Claims(p21)

rule
This section tells you how to make a claim for a credit or refund of excise taxes on fuels. This section also covers recordkeeping requirements and when to include the credit or refund in your income.
taxmap/pubs/p510-024.htm#en_us_publink1000117070

(p21)

rule
Generally, you will provide all the information needed to claim a credit or refund when you properly complete Form 8849, Form 4136, Schedule C (Form 720), Form 6478, or Form 8864. In some cases, you will have to attach additional information. You need to keep records that support your claim for a credit or refund.
Where Refund
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.
taxmap/pubs/p510-024.htm#en_us_publink1000117072

Ultimate purchaser.(p21)

rule
Ultimate purchasers may make claims for the nontaxable use of fuels on Form 4136, Schedule 1 (Form 8849), and Schedule C (Form 720) if reporting excise tax liability on that return. If you are an ultimate purchaser, you must keep the following records.It is important that your records show separately the number of gallons used for each nontaxable use that qualifies as a claim. If the fuel is exported, you must have proof of exportation.
For more information about keeping records, see Publication 583, Starting a Business and Keeping Records, or chapter 1 of Publication 17, Your Federal Income Tax for Individuals.
taxmap/pubs/p510-024.htm#en_us_publink1000117073
Exceptions.(p21)
  1. Generally, the ultimate purchaser may not claim a credit or refund for undyed diesel fuel, undyed kerosene, or kerosene for use in aviation sold for the exclusive use of a state or local government. However, see Claims by credit card issuers, later, for an exception.
  2. The ultimate purchaser may not claim a credit or refund as follows.
    1. The ultimate purchaser of gasoline or aviation gasoline used by a state or local government for its exclusive use or by a nonprofit educational organization for its exclusive use may waive its right to make a claim by providing a certificate that is signed under penalties of perjury by a person authorized to bind the ultimate purchaser and is in the same format as the Model Certificate M. A new certificate is required each year or when any information in the current certificate expires.
    2. The ultimate purchaser of kerosene for use in commercial aviation or noncommercial aviation (other than nonexempt, noncommercial aviation and exclusive use by a state, political subdivision of a state, or the District of Columbia) may waive its right to make a claim by providing a waiver that is signed under penalties of perjury by a person authorized to bind the ultimate purchaser and is in the same format as the Model Waiver L. A new waiver is required each year or when any information in the current waiver expires.
    3. The ultimate purchaser of undyed diesel fuel or undyed kerosene used in certain intercity and local buses may waive its right to make a claim by providing a waiver that is signed under penalties of perjury by a person authorized to bind the ultimate purchaser and is in the same format as the Model Waiver N. A new waiver is required each year or when any information in the current waiver expires.
    4. The ultimate purchaser of kerosene for use in nonexempt, noncommercial aviation must provide a certificate that is signed under penalties of perjury by a person authorized to bind the ultimate purchaser and is in the same format as the Model Certificate Q. A new certificate is required each year or when any information in the current certificate expires.
taxmap/pubs/p510-024.htm#en_us_publink1000117074

Registered ultimate vendor.(p21)

rule
Registered ultimate vendors may make claims for certain sales of fuels on Form 4136, Schedule 2 (Form 8849), and Schedule C (Form 720) if reporting excise tax liability on that return. If you are a registered ultimate vendor, you must keep certain information pertaining to the sale of the fuel.
To make a claim, you must have sold the fuel at a tax-excluded price, repaid the tax to the buyer, or obtained the buyer's written consent to the allowance of the claim. You are required to have a valid certificate or waiver in your possession in order to make the claim.
In addition, you must have a registration number that has not been revoked or suspended. See Form 637.
taxmap/pubs/p510-024.htm#en_us_publink1000117075
State use.(p21)
To make a claim as an ultimate vendor (state), you must have a UV registration number and the fuel cannot be purchased with a credit card as explained below. If you sell undyed diesel fuel, undyed kerosene, or kerosene for use in aviation for use by a state or local government, you must keep the following information.
taxmap/pubs/p510-024.htm#en_us_publink1000117076
Nonprofit educational organization and state use.(p21)
To make a claim as an ultimate vendor (nonprofit educational organization or state), you must have a UV registration number and the fuel cannot be purchased with a credit card as explained later. If you sell gasoline or aviation gasoline to a nonprofit educational organization for its exclusive use or to a state or local government for its exclusive use, you must keep the following information.
taxmap/pubs/p510-024.htm#en_us_publink1000117077
Blocked pump.(p21)
To make a claim as an ultimate vendor (blocked pump), you must have a UP registration number. If you sell undyed kerosene (other than kerosene for use in aviation) from a pump that qualifies as a blocked pump because it is locked by you after each sale and is unlocked by you at the request of the buyer, you must keep the following information for each sale of more than 5 gallons.
taxmap/pubs/p510-024.htm#en_us_publink1000117078
Certain intercity and local bus use.(p21)
To make a claim as an ultimate vendor of undyed diesel fuel or undyed kerosene used in certain intercity and local buses, you must have a UB registration number. You must keep the following information.
taxmap/pubs/p510-024.htm#en_us_publink1000117079
Kerosene for use in commercial aviation or noncommercial aviation.(p21)
To make a claim as an ultimate vendor of kerosene for use in commercial aviation (other than foreign trade) or noncommercial aviation (other than nonexempt, noncommercial aviation and exclusive use by a state, political subdivision of a state, or the District of Columbia), you must have a UA registration number. See Kerosene for use in aviation, earlier, for a list of nontaxable uses. You must keep the following information.
taxmap/pubs/p510-024.htm#en_us_publink1000117080
Kerosene for use in nonexempt, noncommercial aviation.(p22)
To make a claim as an ultimate vendor of kerosene for use in nonexempt, noncommercial aviation, you must have a UA registration number. You must keep the following information.
taxmap/pubs/p510-024.htm#en_us_publink1000117081

Claims by credit card issuers.(p22)

rule
For sales of gasoline, aviation gasoline, diesel fuel, kerosene, or kerosene for use in aviation that are purchased by an exempt user with the use of a credit card, the registered credit card issuer is the only person who can make the claim. An exempt user for this purpose is:
If gasoline is purchased without the use of a credit card, then the registered ultimate vendor of the gasoline may make the claim for refund or credit. However, if the gasoline is purchased with a credit card issued to a state, but the credit card issuer is not registered by the IRS or does not meet the conditions described, the credit card issuer must collect the tax and the state may make the claim.
If diesel fuel, kerosene, or kerosene for use in aviation is purchased without the use of a credit card, the registered ultimate vendor may make the claim for refund or credit. A state is not allowed to make a claim for these fuels. However, if the diesel fuel or kerosene is purchased with a credit card issued to a state, but the credit card issuer is not registered by the IRS or does not meet the conditions described, the credit card issuer must collect the tax and the state may make the claim.
The claim from the credit card issuer must contain the following information as it applies to the fuel covered in the claim.
taxmap/pubs/p510-024.htm#en_us_publink1000117082

Taxpayer identification number.(p22)

rule
To file a claim, you must have a taxpayer identification number. Your taxpayer identification number can be an:
If you normally file only a U.S. individual income tax return (such as Form 1040 or 1040NR), use your SSN or ITIN. You get an SSN by filing Form SS-5, Application for a Social Security Card, with the Social Security Administration. To get an ITIN, file Form W-7, Application for IRS Individual Taxpayer Identification Number, with the IRS.
If you operate a business, use your EIN. If you do not have an EIN, you may apply for one online. Go to the IRS website at irs.gov/businesses/small and click on the "Employer ID Numbers (EINs)" link. You may also apply for an EIN by calling 1-800-829-4933, or you can fax or mail Form SS-4, Application for Employer Identification Number, to the IRS.
taxmap/pubs/p510-024.htm#en_us_publink1000117083

Claiming A Refund(p22)

rule
Generally, you may claim a refund of excise taxes on Form 8849. Complete and attach to Form 8849 the appropriate Form 8849 schedules. The instructions for Form 8849 and the separate instructions for each schedule explain the requirements for making a claim for refund. If you file Form 720, you can use the Schedule C (Form 720) for your refund claims for the quarter. See the Instructions for Form 720. Do not claim a refund on Form 8849 for any amount for which you have filed or will file a claim on Schedule C (Form 720) or Form 4136.
The alternative fuel mixture credit must be claimed on Schedule C (Form 720) against your section 4081 taxable fuel liability for gasoline, diesel, and kerosene and any excess is not allowed. The alternative fuel credit must first be claimed on Schedule C (Form 720) against your section 4041 taxable fuel liability for alternative fuel and CNG. To the extent the alternative fuel credit exceeds this taxable fuel liability, a payment is allowed and may be claimed as a credit on Schedule C (Form 720), or as an income tax credit on Forms 4136, 6478, or 8864, as applicable.
Only one claim may be made for any particular amount of alternative fuel.
taxmap/pubs/p510-024.htm#en_us_publink1000117084

Claiming a Credit on Form 4136(p22)

rule
EIC
For alternative fuel mixtures produced after December 31, 2011, the alternative fuel mixture credit cannot be claimed on Form 4136. See Biodiesel or Renewable Diesel Mixture Credit, Alternative Fuel Credit and Alternative Fuel Mixture Credit in chapter 2, earlier.
A credit may be claimed for certain uses and sales of fuels on Form 4136 when you file your income tax return at the end of the year. If you meet certain requirements (discussed earlier), you may be able to make a claim during the year.
taxmap/pubs/p510-024.htm#en_us_publink1000117085
Credit only.(p22)
You can claim the following taxes only as a credit on Form 4136.
Do not claim a credit for any amount for which you have filed a refund claim on Form 8849 or credit on Schedule C (Form 720).
taxmap/pubs/p510-024.htm#en_us_publink1000117086

When to file.(p22)

rule
You can claim a fuel tax credit on your income tax return for the year you used the fuel (or sold the fuel in the case of a registered ultimate vendor claim).
Tax Tip
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.
taxmap/pubs/p510-024.htm#en_us_publink1000117088

How to claim a credit.(p22)

rule
How you claim a credit depends on whether you are an individual, partnership, corporation, S corporation, or farmers' cooperative association.
taxmap/pubs/p510-024.htm#en_us_publink1000117089
Individuals.(p22)
You claim the credit on the "Credits from" line of Form 1040. Also check box b on that line. If you would not otherwise have to file an income tax return, you must do so to get a fuel tax credit.
taxmap/pubs/p510-024.htm#en_us_publink1000117090
Partnerships.(p22)
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 partnership.
taxmap/pubs/p510-024.htm#en_us_publink1000117091
Other entities.(p22)
Corporations, S corporations, farmers' cooperative associations, and trusts must make the claim on the appropriate line of their applicable income tax return.
Federal, state, and local governments, and certain tax-exempt organizations (as discussed earlier under Claiming a Refund) must use Form 8849, not Form 4136, to make an annual claim.
taxmap/pubs/p510-024.htm#en_us_publink1000117092

Including the Credit or Refund in Income(p23)

rule
EIC
In most situations, the amount claimed as a credit or refund will be less than the amount deducted as fuel tax expense because the LUST tax is generally not refunded.
Include any credit or refund of excise taxes on fuels in your gross income if you claimed the total cost of the fuel (including the excise taxes) as an expense deduction that reduced your income tax liability.
The year you include a credit or refund in gross income depends on whether you use the cash or an accrual method of accounting.
taxmap/pubs/p510-024.htm#en_us_publink1000117094

Cash method.(p23)

rule
If you use the cash method and file a claim for refund, include the refund amount in your gross income for the tax year in which you receive the refund. If you claim a credit on your income tax return, include the credit amount in gross income for the tax year in which you file Form 4136. If you file an amended return and claim a credit, include the credit amount in gross income for the tax year in which you receive the credit.
taxmap/pubs/p510-024.htm#en_us_publink1000117095

Example 1.(p23)

Sharon Brown, a cash basis farmer, filed her 2012 Form 1040 on March 3, 2013. On her Schedule F (Form 1040), Sharon deducted the total cost of gasoline (including $110 of excise taxes) used on the farm. Then, on Form 4136, Sharon claimed $108 as a credit. Sharon reports the $108 as additional income on her 2013 Schedule F (Form 1040).
taxmap/pubs/p510-024.htm#en_us_publink1000117096

Example 2.(p23)

March Corporation uses the calendar year as its tax year. For 2012, the following amounts of excise tax were included in the cost of gasoline the corporation used each quarter in a nontaxable use.
Calendar QuartersFuel Tax ExpenseFuel Tax Claim
Jan. 1 – March 31$1,300$1,293
April 1 – June 30 1,1001,094
July 1 – Sept. 30  400397
Oct. 1 – Dec. 31  300298
Total$3,100$3,082
The corporation deducts the entire cost of the gasoline (including the $3,100 in excise taxes) it used during the year as a business expense on its corporation income tax return, thereby reducing its corporate income tax liability for that year.
Form 8849. March Corporation files quarterly refund claims for the first two quarters (ending March 31 and June 30). It cannot file a quarterly refund claim for the third or fourth quarter because it did not meet the $750 minimum requirement.
Since March Corporation uses the cash method of accounting, the corporation includes $2,387 ($1,293 + $1,094) in its gross income for the tax year in which it receives the refunds (2012).
Form 4136. The corporation claims the remaining amounts ($397 + $298) as a credit on its 2012 income tax return by attaching Form 4136. It files its tax return in 2013. It includes this credit ($695) in its 2013 gross income.
taxmap/pubs/p510-024.htm#en_us_publink1000117097

Accrual method.(p23)

rule
If you use an accrual method, include the amount of credit or refund in gross income for the tax year in which you used the fuels (or sold the fuels if you are a registered ultimate vendor). It does not matter whether you filed for a quarterly refund or claimed the entire amount as a credit.
taxmap/pubs/p510-024.htm#en_us_publink1000117098

Example 3.(p23)

Patty Green uses an accrual method. She files her 2012 return on April 15, 2013. On Schedule C (Form 1040) she deducts the total cost of gasoline (including $155 of excise taxes) used for an off-highway business use during 2012. On Form 4136, Patty claims $153 as a credit. She reports the $153 as additional income on her 2012 Schedule C (Form 1040).
taxmap/pubs/p510-024.htm#en_us_publink1000117099

Example 4.(p23)

Use the same facts as in Example 2 above, except that March Corporation uses an accrual method of accounting. Since the nontaxable use occurred in 2012, the corporation reports the $3,082 of excise taxes as income on its 2012 income tax return. This consists of the $2,387 it claimed on Form 8849 and the $695 it claimed on Form 4136.
taxmap/pubs/p510-024.htm#en_us_publink1000307504

Example.(p23)

rule
Tyler S. Sands used undyed diesel fuel in vehicles used in his construction business. The vehicles were not registered (or required to be registered) for highway use. In the fourth quarter of his 2012 income tax year, which ends in December, he used 3,000 gallons of undyed diesel fuel. The excise tax on the 3,000 gallons of undyed diesel fuel he used was $732 (tax of $.244 per gallon).
Because the tax is less than $750, Tyler must claim a credit for the tax on his 2012 income tax return. He fills out Form 4136 and attaches it to his 2012 income tax return, which he files in 2013. He enters $729 (credit of $.243 per gallon) on the "Credits from" line of his Form 1040 and checks box b.
Tyler uses the cash method of accounting. On his 2012 Schedule C (Form 1040), he deducts the total cost of the fuel, including the tax. When Tyler files his 2013 Form 1040, he will include the $729 credit shown on his 2012 Form 4136 as additional income on his Schedule C (Form 1040) for 2013.
taxmap/pubs/p510-024.htm#en_us_publink1000307505

Example, continued.(p23)

rule
For the first 2 quarters of 2013, Tyler's records show the following.
  ClaimClaim
QuarterGallons UsedTax RateAmount
First 2,750.243$668.25 
Second 2,500.243 607.50 
Tyler could not file a claim for a refund for the first quarter because the amount of the claim was less than $750. He adds the first quarter amount ($668.25) to the second quarter amount ($607.50) and claims a refund of $1,275.75 by filing Form 8849 and Schedule 1 (Form 8849). The claim must be filed by September 30, 2013, which is the last day of the first quarter (July – Sept.) following the last quarter (April – June) included in the claim. He will have to include the $1,275.75 excise tax refund as additional income on his Schedule C (Form 1040) for 2013.