Don’t risk a penalty – Be sure you’re eligible Be careful of social media tax advice. Before you claim the Fuel Tax Credit, check if you’re eligible. An improper claim can result in a penalty of $5,000. Find what to do if you made an improper claim. Businesses get a refundable credit for fuel used in a specific work-related activity with the Fuel Tax Credit. To qualify, you must: Own or operate a business Meet certain requirements, such as running a farm or purchasing aviation gasoline The Fuel Tax Credit is not available to most taxpayers. Don’t be fooled by misleading social media advice. Check if you’re eligible. On this page: Types of fuels and uses Who is and isn’t eligible How to claim If you improperly claimed the Fuel Tax Credit Types of fuels and uses The credit is available only for nontaxable uses of gasoline, aviation gasoline, undyed diesel and undyed kerosene. Nontaxable uses are purposes where fuel isn’t used for regular driving purposes, such as: On a farm for farming purposes Off-highway business use (for equipment, machines, vehicles and tools that operate on private property, farms, or construction sites, not public roads) Commercial fishing Certain types of buses (intercity, local, or school) Find a complete list of eligible types of uses in instructions for Form 4136, Credit for Federal Tax Paid on Fuels. Off-highway business use of gasoline The Fuel Tax Credit does not apply to off-highway business use of gasoline for: Vehicles used for personal use or commuting to work Non-business, off-highway use (minibikes, snowmobiles, power lawn mowers, chain saws and other yard equipment) Other vehicles that are registered or required to be registered to drive on public highways Who is and isn’t eligible Use these examples to help check if you’re eligible for the Fuel Tax Credit: Example of an eligible taxpayer: A taxpayer owns a landscaping business and uses power lawn mowers and chain saws in their business. The gasoline the taxpayer uses to power the lawn mowers and chain saws when performing landscaping services for customers qualifies as fuel used for an off-highway business use. Example of a non-eligible taxpayer: A taxpayer who uses gasoline to power a lawn mower to mow their own yard does not qualify as an off-highway business use. A taxpayer who uses gasoline in their vehicle for personal use, commuting to work, or driving for Uber/Lyft does not qualify for the Fuel Tax Credit. How to claim Complete Form 4136, Credit for Federal Tax Paid on Fuels. Follow instructions on how to make a claim. Keep records to support your claim, such as: A list of vehicles and equipment used, including proof of ownership. Copies of invoices or receipts for the fuel purchases that include: the purpose for which the fuel was used; the number of gallons used for each purpose; the dates of purchase; and the name and address of the supplier, amount purchased and the amount paid If you improperly claimed the Fuel Tax Credit Did you mistakenly claim the credit and receive a letter from the IRS? You can amend your return Find next steps if you were affected by a social media scam Related Form 4136, Credit for Federal Tax Paid on Fuels Publication 510, Excise Taxes Publication 225, Farmer’s Tax Guide Reinstated and extended fuel tax credits
