Fuel Excise Tax Credits and Refunds — How To Claim a Credit or Refund: Farm Business Taxes (2025 IRS Guide)

This guide covers “Fuel Excise Tax Credits and Refunds — How To Claim a Credit or Refund” within farm business taxes. The following material presents the IRS treatment of this topic, including the qualifications, exceptions, and examples in the source section. Read the rules alongside the facts of your own situation before deciding what to report, deduct, or document.

Adapted from Publication 225 (2025), Farmer's Tax Guide, published by the Internal Revenue Service. This guide retains the source edition’s years, amounts, deadlines, and examples. It is guidance for that edition, not a statement that the same figures apply to every tax year.

Fuel Excise Tax Credits and Refunds — How To Claim a Credit or Refund

You may be able to claim a credit or refund of the excise tax on fuels you use for nontaxable uses. The basic rules for claiming credits and refunds are listed in Table 14-2.

Table 14-2. Claiming a Credit or Refund of Excise Taxes

• This table gives the basic rules for claiming a credit or refund of excise taxes on fuels used for a nontaxable use.

.Keep at your principal place of business all records needed to enable the IRS to verify that you are the person entitled to claim a credit or refund and the amount you claimed. You don’t have to use any special form, but the records should establish the following information. .

• The total number of gallons bought and used during the period covered by your claim.

• The date of each purchase.

• The names and addresses of suppliers and amounts bought from each during the period covered by your claim.

• The nontaxable use for which you used the fuel.

• The number of gallons used for each nontaxable use.

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It's important that your records separately show the number of gallons used for each nontaxable use that qualifies as a claim. For more information about recordkeeping, see Pub. 583, Starting a Business and Keeping Records.

Credit or refund.

A credit is an amount that reduces the tax on your income tax return when you file it at the end of the year. If you meet certain requirements, you may claim a refund during the year instead of waiting until you file your income tax return.

Credit only.

You can claim the following taxes only as a credit on your income tax return.

• Tax on gasoline and aviation gasoline you used on a farm for farming purposes.

• Tax on fuels (including undyed diesel fuel or undyed kerosene) you used for nontaxable uses if the total for the tax year is less than $750.

• Tax on fuel you didn’t include in any claim for refund previously filed for any quarter of the tax year.

Claiming a Credit

You make a claim for a fuel tax credit on Form 4136 and attach it to your income tax return. Don’t claim a credit for any excise tax for which you have filed a refund claim.

How to claim a credit.

How you claim a credit depends on whether you are an individual, partnership, corporation, S corporation, trust, or farmers' cooperative association.

Individuals.

You claim the credit on the “Credit for federal tax on fuels” line of your Form 1040 or 1040-SR. If you wouldn’t otherwise have to file an income tax return, you must do so to get a fuel tax credit.

Partnerships.

Partnerships claim the credit by including a statement on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc., showing each partner's share of the number of gallons of each fuel sold or used for a nontaxable use, the type of use, and the applicable credit per gallon. Each partner claims the credit on his or her income tax return for the partner's share of the fuel used by the partnership.

Other entities.

Corporations, S corporations, farmers' cooperative associations, and trusts make the claim on the appropriate line of their income tax return.

When to claim a credit.

You can claim a fuel tax credit on your income tax return for the year you used the fuel.

.You may be able to make a fuel tax claim on an amended income tax return for the year you used the fuel. A claim for credit or refund of an overpayment must generally be filed within the later of: .

• 3 years from the date the original return was filed, or

• 2 years from the date the tax was paid.

.

Claiming a Refund

If eligible, you can claim a refund of excise taxes using Schedule 1 (Form 8849); if you file Form 720, you can use its Schedule C to claim a refund for the quarter; if you file Form 4136, you can use it to claim a refund for your tax year by attaching it to your tax return. Don't claim a refund on any of these forms for any amount that you have filed or will file a claim for refund on another form.

You can use Schedule 1 (Form 8849) to file a claim for a refund for any quarter of your tax year for which you can claim $750 or more. This amount is the excise tax on all fuels used for a nontaxable use during that quarter or any prior quarter (for which no other claim has been filed) during the tax year.

If you can’t claim at least $750 at the end of a quarter, you carry the amount over to the next quarter of your tax year to determine if you can claim at least $750 for that quarter. If you can’t claim at least $750 at the end of the fourth quarter of your tax year, you must claim a credit on your income tax return using Form 4136. Only one claim can be filed for a quarter.

.You can’t claim a refund for excise tax on gasoline and aviation gasoline used on a farm for farming purposes. You must claim a credit on your income tax return for the tax..

How to file a quarterly claim.

File the claim for refund by completing Schedule 1 (Form 8849) and attaching it to Form 8849. Send it to the address shown in the instructions. If you file Form 720, you can use its Schedule C for your refund claims. See the Instructions for Form 720.

When to file a quarterly claim.

You must file a quarterly claim by the last day of the first quarter following the last quarter included in the claim. If you don’t file a timely refund claim for the fourth quarter of your tax year, you will have to claim a credit for that amount on your income tax return, as discussed earlier.

.In most situations, the amount claimed as a credit or refund will be less than the amount of fuel tax paid, because the Leaking Underground Storage Tank (LUST) tax of $0.001 per gallon is generally not subject to credit or refund..

Using the guidance

Keep the documents that establish the dates, amounts, and circumstances described above. References to other chapters, forms, worksheets, or earlier and later sections refer to the linked IRS publication. Check the full publication and its updates before relying on a rule for a different tax year or a situation not addressed here.

Sources and further reading

• Publication 225 (2025), Farmer's Tax Guide: Fuel Excise Tax Credits and Refunds — How To Claim a Credit or Refund — Internal Revenue Service; 2025 edition.

The cited U.S. government text is in the public domain. Source accessed October 28, 2026. Fynoptic has organized this material for educational use and is independent of, and not endorsed by, the IRS.