Federal Fuel Tax Credit

Federal Fuel Tax Credit

Federal excise taxes are imposed on certain fuels when purchased from your suppliers. Depending upon the use of the fuel, tax credits and refunds may be claimed using IRS Form 4136, Credit for Fuel Tax Paid on Fuels.

One of the most common credits claimed are for the purchase of Undyed Diesel Fuel and Undyed Kerosene. A taxpayer who has purchased these undyed fuels may claim a credit or refund of the excise taxes if the fuel was purchased for use in the following activities:

  • On a farm for farming purposes.
  • Off-highway business use (for business use other than in a highway vehicle registered or required to be registered for highway use).
  • Export.
  • In a qualified local bus.
  • In a school bus.
  • Other than as a fuel in a propulsion engine of a diesel-powered highway vehicle (such as home heating oil).
  • Exclusive use by a qualified blood collector organization.
  • In a highway vehicle owned by the United States that is not used on a highway.
  • Exclusive use by a nonprofit educational organization.
  • Exclusive use by a state, political subdivision of a state, or the District of Columbia.
  • In a vehicle owned by an aircraft museum.
  • As a fuel in a propulsion engine of a diesel-powered train.

Fuel tax credits are also available for the nontaxable uses of gasoline, aviation gasoline, kerosene used in aviation, alcohol fuel mixtures, biodiesel or renewable diesel, alternative fuels, diesel water fuel emulsion and blending, exported dyed fuels and exported gasoline blendstocks. The federal rules relating to these fuel tax credits have not changed for a number of years.

Should you have any questions regarding the above please feel free to e-mail us at [email protected].

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