American Taxpayer Relief Act of 2012 (Pub. L. 112-240)
The American Taxpayer Relief Act of 2012 (Pub. L. 112-240) retroactively extends certain fuel tax credits that expired on Dec. 31, 2011. The retroactively extended fuel tax credits are the biodiesel mixture credit, biodiesel credit, alternative fuel credit, and the alternative fuel mixture credit. These credits are now scheduled to expire on Dec. 31, 2013.
These Q&As tell taxpayers how to claim the credits for qualifying sales or uses during 2012. It also describes changes to the cellulosic biofuel credit for 2013.
Until further notice, Forms 720, Quarterly Federal Excise Tax Return, and Forms 8849, Claim for Refund of Excise Taxes, that contain claims for the biodiesel mixture credit (including renewable diesel mixtures), alternative fuel credits, and alternative fuel mixture credits, should only be filed on paper tax forms.
More information on qualifications for the credits is on Form 720, Quarterly Federal Excise Tax Return; Form 720X, Amended Quarterly Federal Excise Tax Return; Form 4136, Credit for Federal Tax Paid on Fuels; Form 6478, Alcohol and Cellulosic Biofuel Credit; Form 8849, Claim for Refund of Excise Tax; and Form 8864, Biodiesel and Renewable Diesel Fuel Credit.
*Q4 relates to refund of Excise Tax - all other questions relate specifically to biofuels
Q1. How do I claim the biodiesel mixture (including renewable diesel mixture) credit for qualifying sales and uses during 2012? What is the deadline for filing a claim?
A1.
- Claims for Calendar Quarters 1, 2, and 3 of 2012:
- If you reported excise tax liability for gasoline, diesel fuel, or kerosene on Form 720 during any of the first three quarters of 2012, you must amend that Form 720 to claim a credit against those liabilities. The amount of this credit may not exceed the total amount of those liabilities.
- To amend your Form 720, file Form 720X in accordance with the instructions to that form.
- You may use a single Form 720X to amend multiple quarters, but state each quarter separately.
- If your biodiesel mixture (including renewable diesel mixture) credit exceeds the amount that you claim on Form 720X, you may claim that excess as an income tax credit on your 2012 federal income tax return by attaching to the return Form 4136, in accordance with the instructions for that form.
- Generally, you have three years from the due date of each Form 720 you filed during 2012 to claim the credit against your excise tax liability for a particular quarter. Generally, you have three years from the due date of your income tax return to claim the credit by attaching Form 4136 to an amended income tax return.
- Claims for Calendar Quarter 4 of 2012:
- If you will report excise tax liabilities for gasoline, diesel fuel, or kerosene on a Form 720 for the fourth quarter of 2012, follow the instructions for line 13 on Schedule C (Form 720). The fourth quarter Form 720 is due Jan. 31, 2013.
- Claims for a refund for qualifying sales or uses during 2012:
- You may be able to claim a refund on Schedule 3 (Form 8849) for qualifying sales and uses during 2012 that exceed your tax liability for gasoline, diesel fuel, and kerosene. You must file these claims by the last day of the first quarter following the earliest quarter of your income tax year included in the claim.
- Example. A taxpayer with an income tax year ending November 30 has claims for September 2012 that exceed its tax liability for gasoline, diesel fuel, and kerosene. This taxpayer may claim that refund on Schedule 3 (Form 8849) by Feb. 28, 2013, or on its Form 720 that is due Jan. 31, 2013.
A2. Yes. See the instructions to Form 720, Form 8849 or Form 4136, as appropriate. If you did not receive certificates during 2012, the biodiesel producer may issue them to you now. However, the IRS cannot require biodiesel producers to issue a certificate.
Q3. How do I claim the biodiesel (including renewable diesel) credit for qualifying sales or uses during 2012? What is the deadline for filing a claim?
A3. You may claim the biodiesel (including renewable diesel) credit for qualifying sales or uses during 2012 as an income tax credit on your 2012 federal income tax return by attaching to the return Form 8864, in accordance with the instructions for that form.
Q4. How do I claim the alternative fuel credit for qualifying sales or uses during 2012? What is the deadline for filing a claim?
A4.
- The term “alternative fuel” generally includes:
- liquefied petroleum gas.
- P Series Fuels.
- compressed or liquefied natural gas .
- liquefied hydrogen .
- any liquid fuel which meets certain carbon recapture requirements and that is derived from coal (including peat) through the Fischer-Tropsch process.
- compressed or liquefied gas derived from biomass (as defined in section 45K(c)(3))
- liquid fuel derived from biomass (as defined in section 45K(c)(3)).
- Claims for Calendar Quarters 1, 2, and 3 of 2012:
- If you reported excise tax liability for alternative fuel on Form 720 during any of the first three quarters of 2012, you must amend that Form 720 to claim a credit against those liabilities. The amount of this credit may not exceed the total amount of those liabilities.
- To amend your Form 720, file Form 720X in accordance with the instructions to that form.
- A single Form 720X may be used to amend multiple quarters, but each quarter must be separately stated.
- If your alternative fuel credit exceeds the amount that you claim on Form 720X, you may claim that excess income tax credit on your 2012 federal income tax return by attaching to the return Form 4136 in accordance with the instructions for that form.
- Generally, you have three years from the due date of each Form 720 you filed during 2012 to claim the credit against your excise tax liability for a particular quarter. Generally, you have three years from the due date of your income tax return to claim the credit by attaching Form 4136 to an amended income tax return.
- Claims for Calendar Quarter 4 of 2012:
- If you will report excise tax liabilities for alternative fuel on your fourth quarter Form 720, follow the instructions for line 13 on Schedule C (Form 720). The fourth quarter Form 720 is due Jan. 31, 2013.
- Claims for a refund for qualifying sales or uses during 2012:
- You may be able to claim a refund on Schedule 3 (Form 8849) for qualifying sales and uses during 2012 that exceed your tax liability for alternative fuel. You must file these claims by the last day of the first quarter following the earliest quarter of your income tax year included in the claim.
- Example. A taxpayer with an income tax year ending November 30 has claims for September 2012. This taxpayer may claim that refund on Form 8849 by Feb. 28, 2013, or on its Form 720 that is due Jan. 31, 2013.
Q5. How do I claim the alternative fuel mixture credit for qualifying sales or uses during 2012? What is the deadline for filing a claim?
A5.
- Claims for Quarters 1, 2 and 3 of 2012
- If you reported excise tax liability for gasoline, diesel fuel, or kerosene on Form 720, during any of the first three quarters of 2012, you must amend that Form 720 to claim a credit against those liabilities. The amount of this credit may not exceed the amount of those liabilities.
- To amend your Form 720, file Form 720X in accordance with the instructions to the form.
- A single Form 720X may be used to amend multiple quarters, but each quarter must be separately stated.
- You may claim the alternative fuel mixture credit only up to the amount of your tax liabilities for gasoline, diesel fuel or kerosene.
- You may not claim any excess alternative fuel mixture credit on your income tax return or receive a payment for that amount.
- Claims for Quarter 4 of 2012
- If you will report excise tax liabilities for gasoline, diesel fuel, for the fourth quarter of 2012, follow the instructions for line 14 on Schedule C (Form 720).
- You may claim the alternative fuel mixture credit only up to the amount of your tax liabilities for gasoline, diesel fuel or kerosene.
- You may not claim any excess alternative fuel mixture credit on your income tax return or receive a payment for this amount.
A6. You must be registered by the IRS at the time you file your claims for the alternative fuel credit and the alternative fuel mixture credit.
If you are already registered with an AL (alternative fuel) or AM (alternative fuel mixture) activity letter, as appropriate, don’t apply again for registration. However, if you are not already registered by the IRS with the appropriate activity letter, apply to the IRS for registration by filing Form 637, Application for Registration (For Certain Excise Tax Activities), in accordance with the instructions to Form 637. You are not registered with the IRS until you receive your letter of registration from the IRS.
Q7. How do I claim the cellulosic biofuel credit for qualifying sales or uses during 2012?
A7. You may claim the cellulosic biofuel credit for qualifying sales or uses during 2012 as an income tax credit on your 2012 federal income tax return by attaching Form 6478 to the return in accordance with the instructions for that form.
You must be registered by the IRS at the time you file your claim for the cellulosic biofuel credit.
If you are already registered with a CB (producers of cellulosic biofuel) activity letter, don’t apply again for registration. However, if you are not already registered by the IRS with the CB activity letter, you may apply to the IRS for registration by filing Form 637, Application for Registration (For Certain Excise Tax Activities), in accordance with the instructions to Form 637. You are not registered with the IRS until you receive your letter of registration from the IRS.
Q8. What changes did the American Taxpayer Relief Act make to the cellulosic biofuel credit?
A8. Effective Jan. 3, 2013, the Act changed the designation of the credit to “second generation biofuel credit”. Also effective on Jan. 3, 2013, biofuels produced from algae, cyanobacteria and lemna feedstocks are eligible for the credit. The second generation biofuel credit expires for fuel produced after Dec. 31, 2013.
Q9. If I am a second generation biofuel producer, do I need to be registered by the IRS to claim the credit?
A9. Yes, you must be registered by the IRS at the time you file your claims for second generation biofuel credit. Apply for activity letter “CB” using Form 637. If you are already registered by the IRS with a CB activity letter, don’t apply again for registration.
Source: http://www.irs.gov/uac/Fuel-Tax-Credit-Extensions-Frequently-Asked-Questions
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