Use Form 8864, Biodiesel and Renewable Diesel Fuels Credit, to claim your section 40A biodiesel and renewable diesel fuels credit. Claim the credit for the tax year in which the sale or use occurs. The credit consists of the: Partnerships, S corporations, cooperatives, estates, and trusts must file this form to claim the credit.
Form 8864, Biodiesel and Renewable Diesel Fuels Credit, is used by business owners to determine claims of biodiesel and renewable diesel fuels credit. A credit may be for biodiesel, renewable diesel, biodiesel mixture, renewable diesel mixture, and small agri-biodiesel. The incentive is permitted as a credit against your income tax liability. You must present a certificate from a producer that identifies the types of fuels as registered with the U.S. Environmental Protection Agency (EPA).
The Biodiesel Income Tax Credit gives eligible producers of biodiesel a $1 per gallon tax credit for producing pure biodiesel or renewable diesel if they comply with the ASTM or the American Society for Testing and Materials standards.
A taxpayer who delivers and sells pure biodiesel is eligible to claim the tax credit from biodiesel and renewable diesel fuels. You are not eligible to file Form 8864 if you have already claimed or will claim any amounts in it that are also in Form 720, Quarterly Federal Excise Tax Return; Form 8849, Claim for Refund of Excise Taxes; or Form 4136, Credit for Federal Tax Paid on Fuels.
Fill out Column A — Number of Gallons Sold or Used, Column B — Rate, and Column C — Column A X Column B for lines 1 to 7.
Column A - Number of gallons sold or used
Enter the number of gallons of fuels you have sold or used
Column B - Rate
Enter the rate that is equivalent to the amount you entered in column a
Column C - Column A x column B
Enter the product of the amount entered in the first two columns.
Line 1 - Biodiesel
Biodiesel includes agri-biodiesel and biodiesel other than agri-biodiesel. It does not include any fuel produced outside the U.S or for use outside the U.S.
Line 2 - Agri-biodiesel
Agri-biodiesel is biodiesel that is extracted from virgin oils including esters from virgin vegetable oils such as corn, sunflower seeds, and canola.
Line 3 - Renewable diesel
Renewable diesel is a liquid fuel from biomass that is any organic material other than oil, natural gas, or coal. It does not include any fuel produced outside the U.S or for use outside the U.S.
Line 4 - Biodiesel (other than agri-biodiesel) included in a biodiesel mixture
This is the type of biodiesel that is considered biodiesel but is not pure or an agri-biodiesel but is part of a mixture.
Line 5 - Agri-biodiesel included in a biodiesel mixture
Any considered agri-biodiesel that is a part of a biodiesel blender.
Line 6 - Renewable diesel included in a renewable diesel mixture
This is any renewable diesel that went through its original process and is included in a renewable diesel mixture afterward.
Line 7 - Qualified agri-biodiesel production
Claiming credits on lines 1 to 7 requires you to attach the Certificate of Biodiesel and Statement of Biodiesel Reseller, if applicable. If any or both of the two have been used in previous claims already, include a statement with the following information:
For lines 8 to 12, enter what is instructed and asked on the blanks provided. Skip this part if you are only claiming a credit given to you from a pass-through entry, an S corporation, partnership, estate, trust, or cooperative.
Enter the sum of lines 1 to 7. This should also be included in your income tax for the tax year.
Enter biodiesel and renewable diesel fuels credit from partnerships, S corporations, cooperatives, estates, and trusts. If you are allocated to a small agri-biodiesel producer from a pass-through entity which gives you the number of gallons for which it receives credit and its capacity for agri-biodiesel.
Enter the sum of lines 8 and 9. Only cooperatives, estates, and trusts are entered in Line 11. For partnerships and S corporations, stop here and report this amount on Schedule K, a document that reports income, losses, and dividends of a business or financial entity (an S corporation)'s partners. All others, stop here and report this amount on the appropriate line of Form 3800, or General Business Credit Form.
Enter the amount allocated to patrons of the cooperative or beneficiaries of the estate or trust. As for the cooperative, it can choose to allocate any part of a small agri-biodiesel producer credit to patrons of the cooperative. See more definitions in the instructions part of the form.
Enter the difference between Line 11 from Line 10. Include this amount on its appropriate Line in Form 3800. Refer to the instructions section of Form 8864 for more information.
Form 8864 is a tax form that needs to be attached to your tax return forms or documents. In accordance with the Paper Reduction Act, provide the information asked on this form as it would carry out the Internal Revenue laws of the United States. This is to ensure that you are complying with these laws and that the state is collecting the right amount of tax.