IRS Explains Procedures for 2015 Biodiesel Tax Credits

The Internal Revenue Service (IRS) has released a guidance document outlining special one-time claim procedures for obtaining the $1.00 per gallon biodiesel blender tax credit for 2015.
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The Internal Revenue Service (IRS) has released a guidance document outlining special one-time claim procedures for obtaining the $1.00 per gallon biodiesel blender tax credit for 2015. Notice 2016-05 prescribes rules for how taxpayers can claim one-time credits for selling or using biodiesel, renewable diesel, and other alternative fuels (such as natural gas) in 2016.  The notice also outlines how entities can offset liability for federal gasoline and/or diesel taxes with the 2015 credits, and further provides instructions for how taxpayers can make certain income tax claims on biodiesel and alternative fuels.

NATSO helped lead a coalition of stakeholders last year to convince Congress to reinstate the biodiesel tax credit retroactive to the beginning of 2015, and for all of 2016 as well. Domestic biodiesel producers had sought to convert the credit to a producer credit beginning in 2016, but Congress ultimately sided with NATSO and its coalition partners in favor of maintaining a blender credit. 
 
According to the IRS guidance, claims for 2015 biodiesel blender credits must be made on IRS Form 8849 (Claim for Refund of Excise Taxes) and IRS Form 8849 (Schedule 3) (Certain Fuel Mixtures and the Alternative Fuel Credit).  Taxpayers are to use a single Form 8849 and Form 8849 (Schedule 3) to claim all biodiesel volumes blended during calendar year 2015. (The IRS will not accept multiple claims for 2015 blends.) 
 
IRS Form 8849 is available here. The IRS is currently revising Form 8849 Schedule 3 and will be posted on the IRS Website in the near future. When it is available, it will be posted here.
 
Claims must be filed between Feb. 8, 2016, and Aug. 8, 2016The IRS will not accept 2015 biodiesel blender credit claims filed after Aug. 8, 2016.
 
NATSO members are advised to review Notice 2016-05, and contact NATSO Regulatory Counsel David Fialkov (dfialkov@natso.com) with any questions.

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