What are the requirements for the Fuel Tax Credit in the United States?

If your business consumes fuel in the United States, you may be eligible to receive a tax credit for a portion of the fuel expense. The Fuel Tax Credit (FTC) is a federal tax credit that can be applied to certain fuels used in off-highway business activities, and on-highway activity that is not subject to the federal highway use tax.

To be eligible for the FTC, your business must be engaged in a trade or business, and you must use the fuel in a business activity. Additionally, the fuel must not be used for a private or non-business purpose. The fuel must also be used in a vehicle, machinery, or equipment that is not designed or used primarily for highway transportation.

The FTC is available for certain types of fuel, including:

Diesel

Gasoline

Kerosene

Liquefied natural gas

Liquefied propane gas

The credit is also available for certain types of alternative fuels, including:

Biodiesel

Renewable diesel

Compressed natural gas

Liquid natural gas

Propane

The credit is calculated based on the number of gallons of fuel consumed, and the tax rate for the fuel. The tax rate for each fuel can be found on the IRS website.

To claim the credit, you must complete Form 4136 and attach it to your tax return. You can find more information about the FTC on the IRS website.