Biodiesel Blender Credit Lapsed December 31, 2016

The $1.00 per gallon federal biodiesel blender credit expired at 11:59 pm on December 31, 2016. This means that blenders may not file for the $1.00 per gallon credit for any blends created after this expiration date. However, claims for credits on blends produced before midnight on December 31, 2016 may still be filed in a timely manner during 2017.

Claim Procedure for Blends Created During Calendar Year 2016

Claim Procedure - Sections 6426(a) and (c) of the Internal Revenue Code allow a person producing a biodiesel mixture during calendar year 2016 to claim a $1.00-per-gallon credit against its tax liability under section 4081 (federal motor fuel excise taxes). The blender filing the claim must first apply the biodiesel mixture credit against its federal motor fuel excise tax liability on IRS Form 720 or Form 720X. To the extent the claim exceeds its federal motor fuel excise tax liability, the claimant may the file a claim for a payment of that excess amount on IRS Form 8849, Claim for Refund of Excise Taxes, and attach Schedule 3 (Form 8849), Certain Fuel Mixtures and the Alternative Fuel Credit.

• Quarterly Claims - IRS Section 6427(i)(3)(C) requires claims for payment of the $100 per gallon biodiesel tax credit to be filed on or before the last day of the first quarter following the earliest quarter of the claimant’s income tax year included in the claim. For example, a calendar-year claimant’s claim for a biodiesel mixture sold or used during November and December by March 31, 2017. Use IRS Form 720 or 720X.

• Annual Claims - If a claimant does not timely file a quarterly claim for the $1.00 per gallon blender credit payment under section 6427(e), then the claimant may file a claim for the amount as a refundable income tax credit. Annual claims for the $1.00 per gallon credit must be filed on IRS Form 4136, Credit for Federal Tax Paid on Fuels, and attached to the claimant’s income tax return. Income tax claims for the $1.00 per gallon biodiesel blender credit must be made within three years from the time the claimant’s income tax return was filed or two years from the time the income tax was paid, whichever is later.

• Payment of Claim - If the IRS has not paid pursuant to a claim filed within 45 days of the date of the filing of such claim (20 days in the case of an electronic claim), the claim shall be paid with interest. Forms – IRS Forms 720, 720X, 8849 and 4136 can be downloaded here.