General Instructions

Table of Contents

Purpose of Form

Use Form 4136 to claim the following.

  • A credit for certain nontaxable uses (or sales) of fuel during your income tax year.

  • The alternative fuel credit.

  • A credit for blending a diesel-water fuel emulsion.

Instead of waiting to claim an annual credit on Form 4136, you may be able to file:

  • Form 8849, Claim for Refund of Excise Taxes, to claim a periodic refund; or

  • Form 720, Quarterly Federal Excise Tax Return, to claim a credit against your tax liability.

You cannot claim any amounts on Form 4136 that you claimed on Form 8849 or Schedule C (Form 720). If you report a tax liability on Form 720, you may be required to offset your tax liability with any credits you claim before claiming a credit on Form 4136 or a refund on Form 8849. The alternative fuel mixture credit must be taken on Schedule C (Form 720) up to the amount of your taxable fuel liability for gasoline (IRS No. 62), diesel (IRS No. 60), and kerosene (IRS No. 35) reported on Form 720.

Partnerships.    Partnerships (other than electing large partnerships) cannot file this form. Instead, they must include a statement on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc., 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.

Additional Information

  • Pub. 510, Excise Taxes, has more information on nontaxable uses and the definitions of terms, such as ultimate vendor and blocked pump. Pub. 510 also contains information on fuel tax credits and refunds.

  • Pub. 225, Farmer's Tax Guide, also includes information on credits and refunds for the federal excise tax on fuels applicable to farmers.

  • Notice 2005-4 (alcohol and biodiesel fuels; off-highway vehicles; aviation-grade kerosene; diesel fuel in buses; displaying registration on vessels; sales of gasoline to states, towns, and educational nonprofits; two-party exchanges of taxable fuel; and classifying transmix and diesel fuel blendstocks as diesel fuel). You can find Notice 2005-4 on page 289 of IRB 2005-2 at  
    www.irs.gov/irb/2005-02_IRB/ar14.html.

  • Notice 2005-62 (certificates for biodiesel, aviation-grade or nontaxable use kerosene); page 443 of IRB 2005-35 at 
    www.irs.gov/irb/2005-35_IRB/ar18.html.

  • Notice 2005-80 (LUST tax, treatment of kerosene for use in aviation, credit card sales of taxable fuel to exempt entities, diesel-water fuel emulsions, mechanical dye injection of diesel fuel and kerosene); page 953 of IRB 2005-46 at  
    www.irs.gov/irb/2005-46_IRB/ar14.html.

  • Notice 2006-92 (alternative fuels and alternative fuel mixtures); page 774 of IRB 2006-43 at  
    www.irs.gov/irb/2006-43_IRB/ar14.html.

Recordkeeping

You must keep records to support any credits claimed on this return for at least 3 years from the date the return is due or filed, whichever is later.

Including the Fuel Tax Credit in Income

You must include in your gross income the amount of the credit from line 17 if you took a deduction on your tax return that included the amount of the taxes and that deduction reduced your income tax liability. See Pub. 510 for more information.

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