How Do I Claim the Federal Fuel Tax Credit?

Federal Fuel Tax Creditwritten by Amy Shewmaker

How to claim the fuel tax credit? The first step is to determine if you qualify for the credit. The IRS is watching for fraudulent claims, and the penalty for fuel tax credit fraud can be up to $5,000. So, the question is, who can qualify for the credit?

Qualified taxpayers
The credit is for the amount of excise taxes included in the price of gasoline, and is available mostly for farmers, other off-highway business use, local transit systems, and by operators of intercity, local or school buses.

Form 4136
Once you’ve determined if you qualify, you may claim the credit on the Form 4136 “Credit for Federal Tax Paid on Fuels,” which will accompany your income tax return.

The credit may be claimed within three years after the due date for filing the return on which the credit may be claimed or within two years from the time the tax was paid, whichever is later. If the amount of the credit would be $1,000 or more for gasoline or for diesel and special motor fuels used during any of the first three quarters of the tax year, a taxpayer may elect to file a quarterly claim for refund.

Partnerships (other than electing large partnerships) cannot use Form 4136. Instead, they must include a statement on Schedule K-1 (Form 1065) showing the allocation to each partner specifying the number of gallons of each fuel used during the tax year, the applicable credit per gallon, the nontaxable use or sale, and any additional information required to be submitted.

Please contact our office if you have any questions about the federal fuel tax credit 417-881-0145.


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