Form 6478 Credit for Alcohol Used as Fuel

2006 Form 6478, Credit for Alcohol Used as Fuel
Circulation: This is the first circulated draft of the 2006 Form 6478 for your review and
comments. See below for a discussion of the major changes.
TPCC Meeting: None, but one may be arranged if requested.
Prior version: The 2005 Form 6478 is available at: http://www.irs.gov/pub/irs-pdf/f6478.pdf
Other Products: Circulations of draft tax forms, instructions, notices, and publications are
posted at:http://taxforms.web.irs.gov/draft_products.html
Comments: Please email, fax, call, or mail any comments by May 28, 2006.
Mike Cyrus
Tax Forms and Publications
SE:W:CAR:MP:T:B:P
Email: [email protected]
Phone: 202-927-9545
Fax: 202-622-3262

Major Changes
On the Form[1] Under the Caution before Part I, the first bulleted item is removed because the
What’s New section it referred to is removed from the Instructions.
Part I
[2] There are a total of 3 new lines added to the form.
• Line 4 is added to indicate the IRC section 87 inclusion in income of the credit.
• Lines 12 and 13 are added to indicate an allocation of the credit to patrons of
cooperatives and beneficiaries of estates or trusts.
All subsequent lines are renumbered accordingly.
[3] Line 6 (old line 5) is rewritten to direct cooperatives, estates, and trusts, to new line
12 for the allocation. Partnerships and S corporations are directed to Schedules K. Other
entities are now directed to line 7.
[4] Line 11 (old line 10) is rewritten to eliminate the text “Current year credit.”
Part II
[5] Lines 17c, d, and e (old lines 14c, d, and e) are rewritten because the possessions tax
credit is expired and the nonconventional source fuel credit is part of the general business
credit and so relegated to the Form 3800 with respect to Part II. In their place now (and
previously listed in the instructions) are the qualified electric vehicle credit, the
alternative motor vehicle credit, and the alternative fuel vehicle refueling property credit
on new lines 17c, d, and e, respectively.

[6] Line 24 (old line 21) is rewritten with one set of instructions for Cooperatives,
estates, and trusts, and a separate set of instructions for All others.
In the Instructions[1] The What’s New section is removed.
[2] The second paragraph under the Note on page 3, telling filers to skip lines 1 through
3, is eliminated as it is unnecessary.
[3] The Cooperative election information under line 1 is moved from the first column of
page 3 to the second column (under the new line 12 instructions).
[4] Instructions for new line 4 are given a “Line 4” heading and taken from the last
paragraph of page 2 and moved to page 3.
[5] A portion of the instructions for lines 6 and 12 (old lines 5 and 10) regarding
allocating the credit, are removed from page 3 because similar instructions on the form at
lines 6 and 12 suffice.
[6] The instructions for line 14 are eliminated from page 4 because the information is
now shown on the form at new lines 17c, d, and e.
[7] The text “(line 20 is smaller than line 10)” is removed from the new line 24 (old line
21) instructions on page 4 because it is unnecessary.

1
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I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
FORM 6478, PAGE 1 of 4
MARGINS: TOP 13 mm (1⁄ 2 "), CENTER SIDES
PRINTS: HEAD to HEAD
PAPER: WHITE WRITING, SUB. 20.
INK: BLACK
FLAT SIZE: 407 mm (16") 3 279 mm (11"),
FOLD TO: 203 mm (8") 3 279 mm (11")
PERFORATE: ON FOLD

DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Form

Action

Date

Signature

O.K. to print
Revised proofs
requested

OMB No. 1545-0231

6478

Credit for Alcohol Used as Fuel

2006

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©

Department of the Treasury
Internal Revenue Service

Attach to your tax return.

Attachment
Sequence No.

83

Identifying number

Name(s) shown on return

Caution: You cannot claim any amounts on Form 6478 that you claimed (or will claim) on Schedule C (Form 720), Form 8849, or
Form 4136.

Part I

Current Year Credit
Type of Alcohol Fuel

1

(a)
Number of Gallons of
Alcohol Sold or Used

(b)
Rate

(c)
Column (a) x Column (b)

*

Qualified ethanol fuel production (in gallons)
1
$.10
(see instructions for election)
Alcohol 190 proof or greater and alcohol 190 proof or greater
$.51
2
in fuel mixtures
Alcohol less than 190 proof but at least 150 proof and alcohol
$.3778
3
less than 190 proof but at least 150 proof in fuel mixtures
4
Add the amounts in column (c) on lines 1, 2, and 3. Include this amount in your income for 2006 (see instructions)
5
Alcohol fuel credit from a partnership, S corporation, cooperative, estate, or trust (see instructions)

2
3
4
5

Add lines 4 and 5, column (c). Cooperatives, estates, and trusts, go to line 12. Partnerships and
S corporations, report on Schedule K the credit allocated to each partner or shareholder. All
others continue on to line 6
Last sentence on
Alcohol fuel credit included on line 6 from passive activities (see instructions) line 6 should say:
Subtract line 7 from line 6
All others continue
Alcohol fuel credit allowed for 2006 from a passive activity (see instructions) on to line 7.

6

7
8
9

6
7
8
9

10

Carryback of alcohol fuel credit from 2007 (see instructions)

10

11

Add lines 8 through 10

11

12

Amount allocated to patrons of the cooperative or beneficiaries of the estate or trust (see
instructions)
Cooperatives, estates, and trusts. Subtract line 12 from line 11. Use this amount to complete
Part II

13

*

13
Only the rate for ethanol is shown. See instructions for lines 2 and 3 for rates for alcohol other than ethanol.

Part II
14
15
16
17a
b
c
d
e
f
18
19
20
21
22
23
24

12

Allowable Credit Caution: If you have both an alcohol fuel credit and a credit from Section B of
Form 8835, do not complete Part II below. Instead, go to Form 8835 (see instructions).

Regular tax before credits (see instructions)
Alternative minimum tax (see instructions)
Add lines 14 and 15
17a
Foreign tax credit
17b
Credits from Form 1040, lines 47 through 51 and 52 through 54
17c
Qualified electric vehicle (Form 8834, line 20)
17d
Alternative motor vehicle credit (Form 8910, line 18)
17e
Alternative fuel vehicle refueling property credit (Form 8911, line 19)
Add lines 17a through 17e
Net income tax. Subtract line 17f from line 16. If zero, skip lines 19 through 22 and enter -0- on
line 23
19
Net regular tax. Subtract line 17f from line 14. If zero or less, enter -0Enter 25% (.25) of the excess, if any, of line 19 over $25,000 (see instructions)
Subtract line 20 from line 18. If zero or less, enter -0General business credit (see instructions)
Subtract line 22 from line 21. If zero or less, enter -0Credit allowed for the current year. Cooperatives, estates, and trusts. Enter the smaller of
line 13 or 23. Report this amount on Form 1120C, line 5c, or Form 1041, Schedule G, line 2c.
If line 23 is smaller than line 13, see instructions. All others. Enter the smaller of line 11 or 23.
Report this amount on Form 1040, line 55; Form 1120, Schedule J, line 5c; Form 1120-A,
Part I, line 2; or the applicable line of your return. If line 23 is smaller than line 11, see instructions

For Paperwork Reduction Act Notice, see page 4.

Cat. No. 13605J

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Form

6478

(2006)

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I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
FORM 6478, PAGE 2 of 4
MARGINS: TOP 13 mm (1⁄ 2 "), CENTER SIDES
PRINTS: HEAD to HEAD
PAPER: WHITE WRITING, SUB. 20.
INK: BLACK
FLAT SIZE: 407 mm (16") 3 279 mm (11"),
FOLD TO: 203 mm (8") 3 279 mm (11")
PERFORATE: ON FOLD

DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Form 6478 (2006)

General Instructions

Page

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Section references are to the Internal Revenue Code.

Purpose of Form

Use Form 6478 to figure your credit for alcohol used as fuel.
You claim the credit for the tax year in which the sale or use
occurs. This credit consists of the:
● Alcohol mixture credit,
● Alcohol credit, and
● Small ethanol producer credit.
You may claim or elect not to claim the alcohol fuel credit
at any time within 3 years from the due date of your return
(determined without regard to extensions) on either an
original or an amended return for the tax year of the sale or
use.
Caution: Before claiming a credit on Form 6478, the alcohol
fuel mixture credit must be taken against any section 4081
liability on Form 720. Any credit in excess of the section
4081 liability can be taken as a claim for payment on Form
8849 or an income tax credit on Form 4136.

Definitions and Special Rules
Qualified Ethanol Fuel Production

2

This is ethanol produced by an eligible small ethanol
producer (defined below) which during the tax year:
1. Does not exceed 15 million gallons;
2. Is sold by the producer to another person—
● For use by the buyer in the buyer’s trade or business to
produce a qualified mixture (other than casual off-farm
production),
● For use by the buyer as a fuel in a trade or business, or
● Who sells the ethanol at retail to another person and puts
the ethanol in the retail buyer’s fuel tank; or
3. Is used or sold by the producer for any purpose
described in 2 above.

Alcohol Fuel Mixture

The alcohol must be used to make a qualified mixture. A
qualified mixture combines alcohol with gasoline or special
fuel. The producer of the mixture either:
● Used it as fuel, or
● Sold it as fuel to another person.
The credit is available only to the producer who blends the
mixture. The producer must use or sell the mixture in a trade
or business and the credit is available only for the year the
mixture is sold or used. The credit is not allowed for casual
off-farm production of a qualified mixture.
Registration

All producers and importers of alcohol with a proof of at least
190 must be registered with the IRS. See Form 637,
Application for Registration (For Certain Excise Tax Activities).
Coordination With Excise Tax Credit

Only one credit may be taken with respect to any gallon of
alcohol in a mixture reported on line 2. If any amount is
claimed (or will be claimed) with respect to any gallon of
alcohol on Form 720, Quarterly Federal Excise Tax Return,
Form 8849, Claim for Refund of Excise Taxes, or Form 4136,
Credit for Federal Tax Paid on Fuels, then a claim cannot be
made on Form 6478 for that gallon of alcohol.

Recapture of Credit
You must pay a tax on each gallon of alcohol (or the alcohol
in the mixture) at the rate you used to figure the credit if you:
● Separate the alcohol from the mixture,
● Use the mixture other than as a fuel,
● Mix alcohol on which the credit was allowed for the retail
sale,
● Use the alcohol other than as a fuel, or
● Do not use the fuel for the purposes described under
Qualified Ethanol Fuel Production.
Report the tax on Form 720.

Eligible Small Ethanol Producer
This is a person who, at all times during the tax year, has a
productive capacity for alcohol of 30 million gallons or less
(60 million gallons or less for tax years ending after August 8,
2005). This capacity includes alcohol made from petroleum,
natural gas, coal, peat, and alcohol of less than 150 proof.

Alcohol
Alcohol, for credit purposes, includes ethanol and methanol
but does not include the following.
● Alcohol produced from petroleum, natural gas, or coal
(including peat). Methanol produced from methane gas
formed in waste disposal sites is not alcohol produced from
natural gas, and is included for credit purposes.
● Alcohol of less than 150 proof. In figuring the proof of any
alcohol, disregard any denaturants (additives that make the
alcohol unfit for human consumption). The volume of alcohol
includes any denaturant up to 5% of the volume of the
alcohol and denaturant combined.
The alcohol must not be a mixture with gasoline or special
fuel (other than as a denaturant). The credit is for alcohol
which during the tax year you:
● Used as a fuel in a trade or business, or
● Sold at retail to another person and put in the fuel tank of
that person’s vehicle.
However, no credit is allowed for alcohol you used as a fuel
in a trade or business if that alcohol was sold in a retail sale
described above.

Specific Instructions
Part I. Current Year Credit
Use lines 1 through 3 to figure any alcohol fuel credit from
your own trade or business.
Note. We have shown in column (b) the rate for ethanol only. If
you have a credit for alcohol other than ethanol, enter in
column (b) the applicable rate shown in the instructions for
lines 2 and 3.
Line 1
Enter the number of gallons of ethanol, up to 15 million
gallons, that meet the conditions listed under Qualified Ethanol
Fuel Production on page 2. Cooperatives enter any amount of
the small ethanol producer credit not allocated to patrons.
Multiply by the rate of 10 cents per gallon.
Once made, the election cannot be revoked.
Important: The amount of the credit determined for lines 2
and 3 below with respect to alcohol in qualified mixtures
must be reduced by the excise tax benefit for qualified
methanol or ethanol fuel reflected on Form 720. See sections
40(c) and 4041(b)(2).

1
I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
FORM 6478, PAGE 3 of 4
MARGINS: TOP 13 mm (1⁄ 2 "), CENTER SIDES
PRINTS: HEAD to HEAD
PAPER: WHITE WRITING, SUB. 20.
INK: BLACK
FLAT SIZE: 407 mm (16") 3 279 mm (11"),
FOLD TO: 203 mm (8") 3 279 mm (11")
PERFORATE: ON FOLD

DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Form 6478 (2006)

Line 2

Page

Enter the number of gallons of alcohol that is less than 190
proof but at least 150 proof and alcohol that is less than 190
proof but at least 150 proof in qualified mixtures (mixtures of
alcohol and gasoline or alcohol and special fuels). For
alcohol other than ethanol, the rate is 45 cents per gallon.
Line 4

Line 12
Estate or trust. The credit on line 11 is allocated between the
estate or trust and the beneficiaries in proportion to the
income allocable to each.

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Enter the number of gallons of alcohol that is 190 proof or
greater and alcohol that is 190 proof or greater in qualified
mixtures (mixtures of alcohol and gasoline or alcohol and
special fuels). For alcohol other than ethanol, the rate is 60
cents per gallon.
Line 3

3

The total credit shown in column (c) on lines 1, 2, and 3, must
be included in income under “other income” on the applicable
line of your income tax return, even if you cannot use all of the
credit because of the tax liability limit. However, if you are
subject to the alternative minimum tax (AMT), this amount is
not income in computing AMT and must be subtracted when
figuring your alternative minimum taxable income. Do this by
including this amount on line 26 of Form 6251, line 23 of
Schedule I, Form 1041, or line 2o of Form 4626.
Line 5
Enter the amount of credit that was allocated to you as a
shareholder, partner, beneficiary, or patron.
If your credit from a pass-through entity includes the small
ethanol producer credit, you, as a shareholder, partner,
beneficiary, or patron, are subject to the 15-million-gallon
limitation for line 1 and the 30-million-gallon (60-million-gallon
for tax years ending after August 8, 2005) productive capacity
limitation for an eligible small ethanol producer. If you receive
a small ethanol producer credit from more than one entity,
your credit may be limited.
Line 6

If the credit includes the small ethanol producer credit, the
S corporation or partnership (other than an electing large
partnership) must provide the following additional information:
● The amount of the small ethanol producer credit included as
part of the pass-through credit;
● The number of gallons claimed at the entity level for the
small ethanol producer credit; and
● The productive capacity of the entity.
Line 7
Enter the amount included on line 6 that is from a passive
activity. Generally, a passive activity is a trade or business in
which you did not materially participate. Rental activities are
generally considered passive activities, whether or not you
materially participate. For details, see Form 8582-CR,
Passive Activity Credit Limitations (for individuals, trusts, and
estates), or Form 8810, Corporate Passive Activity Loss and
Credit Limitations (for corporations).

Cooperative election to allocate the small ethanol
producer credit to patrons. A cooperative described in
section 1381(a) can elect to allocate any part of the small
ethanol producer credit to patrons of the cooperative. The
credit is allocated among the patrons eligible to share in
patronage dividends on the basis of the quantity or value of
business done with or for the patrons for the tax year.
To make an election, attach a statement to your timely filed
return (including extensions) indicating the amounts you would
report in columns (a) and (c) on line 1 of Form 6478 without an
election, the amounts you are electing to allocate to patrons,
and the amounts that will not be allocated.
If you timely filed your return without making an election,
you can still make the election by filing an amended return
within 6 months of the due date of the return (excluding
elections). Write “Filed pursuant to section 301.9100-2” on the
amended return.
If the credit includes the small ethanol producer credit, the
estate or trust must provide the following additional
information:
● The amount of the small ethanol producer credit included as
part of the pass-through credit;
● The number of gallons claimed by the estate or trust for the
small ethanol producer credit; and
● The productive capacity of the estate or trust.

Part II. Allowable Credit
The credit allowed for the current year may be limited based
on your tax liability. Use Part II to figure the allowable credit.
However, if you have a current year credit and a credit from
Section B of Form 8835, Renewable Electricity and Refined
Coal Production Credit, do not complete Part II. Instead, go to
Form 8835 to compute the allowable combined credit.
Line 14
Enter the regular tax before credits from the following line of
the appropriate form or schedule.
● Individuals: Form 1040, line 44.
● Corporations: Form 1120, Schedule J, line 3; Form 1120-A,
Part I, line 1; or the applicable line of your return.
● Estates and trusts: The sum of the amounts from Form
1041, Schedule G, lines 1a and 1b; or the amount from the
applicable line of your return.
Line 15
Enter the alternative minimum tax (AMT) from the following line
of the appropriate form or schedule.
● Individuals: Form 6251, line 35.
● Corporations: Form 4626, line 14.
● Estates and trusts: Form 1041, Schedule I, line 56.

Line 9

Line 20

Enter the passive activity credit allowed for the 2006 credit
for alcohol used as fuel from Form 8582-CR or Form 8810.

See section 38(c)(5) for special rules that apply to married
couples filing separate returns, controlled corporate groups,
regulated investment companies, real estate investment
trusts, and estates and trusts.

Line 10
Use only if you amend your 2006 return to carry back an
unused credit from 2007.

1
I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
FORM 6478, PAGE 4 of 4
MARGINS: TOP 13 mm (1⁄ 2 "), CENTER SIDES
PRINTS: HEAD to HEAD
PAPER: WHITE WRITING, SUB. 20.
INK: BLACK
FLAT SIZE: 407 mm (16") 3 279 mm (11"),
FOLD TO: 203 mm (8") 3 279 mm (11")
PERFORATE: ON FOLD

DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Form 6478 (2006)

Line 22

Page

● The amount from the last line of any single separate
general business credit form.
Line 24

You are not required to provide the information requested
on a form that is subject to the Paperwork Reduction Act
unless the form displays a valid OMB control number. Books
or records relating to a form or its instructions must be
retained as long as their contents may become material in the
administration of any Internal Revenue law. Generally, tax
returns and return information are confidential, as required by
section 6103.
The time needed to complete and file this form will vary
depending on individual circumstances. The estimated
burden for individual taxpayers filing this form is approved
under OMB control number 1545-0074 and is included in the
estimates shown in the instructions for their individual
income tax return. The estimated burden for all other
taxpayers who file this form is shown below.

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Enter the amount of all other allowed credits for the current
year included in the general business credit. If you are filing
Form 3800, enter the amount from line 22 of that form plus the
following.
● Form 8844, line 24.

If you cannot use all of the credit because of the tax liability
limit, you cannot carry the unused credit back. You can carry
the unused credit forward up to 20 years.

Paperwork Reduction Act Notice. We ask for the
information on this form to carry out the Internal Revenue laws
of the United States. You are required to give us the
information. We need it to ensure that you are complying with
these laws and to allow us to figure and collect the right
amount of tax.

4

Recordkeeping
X hr., XX min.
Learning about the
law or the form
XX min.
Preparing and sending the form
to the IRS
XX min.
If you have comments concerning the accuracy of these
time estimates or suggestions for making this form simpler,
we would be happy to hear from you. See the instructions for
the tax return with which this form is filed.

Printed on recycled paper

1
TLS, have you
transmitted all R
text files for this
cycle update?

Date

I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
FORM 6478, PAGE 1 of 4
MARGINS: TOP 13 mm (1⁄ 2 "), CENTER SIDES
PRINTS: HEAD to HEAD
PAPER: WHITE WRITING, SUB. 20.
INK: BLACK
FLAT SIZE: 407 mm (16") 3 279 mm (11"),
FOLD TO: 203 mm (8") 3 279 mm (11")
PERFORATE: ON FOLD

DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Form

Action

Date

Signature

O.K. to print
Revised proofs
requested

OMB No. 1545-0231

6478

Credit for Alcohol Used as Fuel

2006

f
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©

Department of the Treasury
Internal Revenue Service

Attach to your tax return.

Attachment
Sequence No.

83

Identifying number

Name(s) shown on return

Caution: You cannot claim any amounts on Form 6478 that you claimed (or will claim) on Schedule C (Form 720), Form 8849, or
Form 4136.

Part I

Current Year Credit
Type of Alcohol Fuel

1

(a)
Number of Gallons of
Alcohol Sold or Used

(b)
Rate

(c)
Column (a) x Column (b)

*

Qualified ethanol fuel production (in gallons)
1
$.10
(see instructions for election)
Alcohol 190 proof or greater and alcohol 190 proof or greater
$.51
2
in fuel mixtures
Alcohol less than 190 proof but at least 150 proof and alcohol
$.3778
3
less than 190 proof but at least 150 proof in fuel mixtures
4
Add the amounts in column (c) on lines 1, 2, and 3. Include this amount in your income for 2006 (see instructions)
5
Alcohol fuel credit from a partnership, S corporation, cooperative, estate, or trust (see instructions)

2
3
4
5

Add lines 4 and 5, column (c). Cooperatives, estates, and trusts, go to line 12. Partnerships and
S corporations, report on Schedule K the credit allocated to each partner or shareholder. All
others continue on to line 6
Last sentence on
Alcohol fuel credit included on line 6 from passive activities (see instructions) line 6 should say:
Subtract line 7 from line 6
All others continue
Alcohol fuel credit allowed for 2006 from a passive activity (see instructions) on to line 7.

6

7
8
9

6
7
8
9

10

Carryback of alcohol fuel credit from 2007 (see instructions)

10

11

Add lines 8 through 10

11

12

Amount allocated to patrons of the cooperative or beneficiaries of the estate or trust (see
instructions)
Cooperatives, estates, and trusts. Subtract line 12 from line 11. Use this amount to complete
Part II

13

*

13
Only the rate for ethanol is shown. See instructions for lines 2 and 3 for rates for alcohol other than ethanol.

Part II
14
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17a
b
c
d
e
f
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20
21
22
23
24

12

Allowable Credit Caution: If you have both an alcohol fuel credit and a credit from Section B of
Form 8835, do not complete Part II below. Instead, go to Form 8835 (see instructions).

Regular tax before credits (see instructions)
Alternative minimum tax (see instructions)
Add lines 14 and 15
17a
Foreign tax credit
17b
Credits from Form 1040, lines 47 through 51 and 52 through 54
17c
Qualified electric vehicle (Form 8834, line 20)
17d
Alternative motor vehicle credit (Form 8910, line 18)
17e
Alternative fuel vehicle refueling property credit (Form 8911, line 19)
Add lines 17a through 17e
Net income tax. Subtract line 17f from line 16. If zero, skip lines 19 through 22 and enter -0- on
line 23
19
Net regular tax. Subtract line 17f from line 14. If zero or less, enter -0Enter 25% (.25) of the excess, if any, of line 19 over $25,000 (see instructions)
Subtract line 20 from line 18. If zero or less, enter -0General business credit (see instructions)
Subtract line 22 from line 21. If zero or less, enter -0Credit allowed for the current year. Cooperatives, estates, and trusts. Enter the smaller of
line 13 or 23. Report this amount on Form 1120C, line 5c, or Form 1041, Schedule G, line 2c.
If line 23 is smaller than line 13, see instructions. All others. Enter the smaller of line 11 or 23.
Report this amount on Form 1040, line 55; Form 1120, Schedule J, line 5c; Form 1120-A,
Part I, line 2; or the applicable line of your return. If line 23 is smaller than line 11, see instructions

For Paperwork Reduction Act Notice, see page 4.

Cat. No. 13605J

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Form

6478

(2006)

1
I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
FORM 6478, PAGE 2 of 4
MARGINS: TOP 13 mm (1⁄ 2 "), CENTER SIDES
PRINTS: HEAD to HEAD
PAPER: WHITE WRITING, SUB. 20.
INK: BLACK
FLAT SIZE: 407 mm (16") 3 279 mm (11"),
FOLD TO: 203 mm (8") 3 279 mm (11")
PERFORATE: ON FOLD

DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Form 6478 (2006)

General Instructions

Page

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Section references are to the Internal Revenue Code.

Purpose of Form

Use Form 6478 to figure your credit for alcohol used as fuel.
You claim the credit for the tax year in which the sale or use
occurs. This credit consists of the:
● Alcohol mixture credit,
● Alcohol credit, and
● Small ethanol producer credit.
You may claim or elect not to claim the alcohol fuel credit
at any time within 3 years from the due date of your return
(determined without regard to extensions) on either an
original or an amended return for the tax year of the sale or
use.
Caution: Before claiming a credit on Form 6478, the alcohol
fuel mixture credit must be taken against any section 4081
liability on Form 720. Any credit in excess of the section
4081 liability can be taken as a claim for payment on Form
8849 or an income tax credit on Form 4136.

Definitions and Special Rules
Qualified Ethanol Fuel Production

2

This is ethanol produced by an eligible small ethanol
producer (defined below) which during the tax year:
1. Does not exceed 15 million gallons;
2. Is sold by the producer to another person—
● For use by the buyer in the buyer’s trade or business to
produce a qualified mixture (other than casual off-farm
production),
● For use by the buyer as a fuel in a trade or business, or
● Who sells the ethanol at retail to another person and puts
the ethanol in the retail buyer’s fuel tank; or
3. Is used or sold by the producer for any purpose
described in 2 above.

Alcohol Fuel Mixture

The alcohol must be used to make a qualified mixture. A
qualified mixture combines alcohol with gasoline or special
fuel. The producer of the mixture either:
● Used it as fuel, or
● Sold it as fuel to another person.
The credit is available only to the producer who blends the
mixture. The producer must use or sell the mixture in a trade
or business and the credit is available only for the year the
mixture is sold or used. The credit is not allowed for casual
off-farm production of a qualified mixture.
Registration

All producers and importers of alcohol with a proof of at least
190 must be registered with the IRS. See Form 637,
Application for Registration (For Certain Excise Tax Activities).
Coordination With Excise Tax Credit

Only one credit may be taken with respect to any gallon of
alcohol in a mixture reported on line 2. If any amount is
claimed (or will be claimed) with respect to any gallon of
alcohol on Form 720, Quarterly Federal Excise Tax Return,
Form 8849, Claim for Refund of Excise Taxes, or Form 4136,
Credit for Federal Tax Paid on Fuels, then a claim cannot be
made on Form 6478 for that gallon of alcohol.

Recapture of Credit
You must pay a tax on each gallon of alcohol (or the alcohol
in the mixture) at the rate you used to figure the credit if you:
● Separate the alcohol from the mixture,
● Use the mixture other than as a fuel,
● Mix alcohol on which the credit was allowed for the retail
sale,
● Use the alcohol other than as a fuel, or
● Do not use the fuel for the purposes described under
Qualified Ethanol Fuel Production.
Report the tax on Form 720.

Eligible Small Ethanol Producer
This is a person who, at all times during the tax year, has a
productive capacity for alcohol of 30 million gallons or less
(60 million gallons or less for tax years ending after August 8,
2005). This capacity includes alcohol made from petroleum,
natural gas, coal, peat, and alcohol of less than 150 proof.

Alcohol
Alcohol, for credit purposes, includes ethanol and methanol
but does not include the following.
● Alcohol produced from petroleum, natural gas, or coal
(including peat). Methanol produced from methane gas
formed in waste disposal sites is not alcohol produced from
natural gas, and is included for credit purposes.
● Alcohol of less than 150 proof. In figuring the proof of any
alcohol, disregard any denaturants (additives that make the
alcohol unfit for human consumption). The volume of alcohol
includes any denaturant up to 5% of the volume of the
alcohol and denaturant combined.
The alcohol must not be a mixture with gasoline or special
fuel (other than as a denaturant). The credit is for alcohol
which during the tax year you:
● Used as a fuel in a trade or business, or
● Sold at retail to another person and put in the fuel tank of
that person’s vehicle.
However, no credit is allowed for alcohol you used as a fuel
in a trade or business if that alcohol was sold in a retail sale
described above.

Specific Instructions
Part I. Current Year Credit
Use lines 1 through 3 to figure any alcohol fuel credit from
your own trade or business.
Note. We have shown in column (b) the rate for ethanol only. If
you have a credit for alcohol other than ethanol, enter in
column (b) the applicable rate shown in the instructions for
lines 2 and 3.
Line 1
Enter the number of gallons of ethanol, up to 15 million
gallons, that meet the conditions listed under Qualified Ethanol
Fuel Production on page 2. Cooperatives enter any amount of
the small ethanol producer credit not allocated to patrons.
Multiply by the rate of 10 cents per gallon.
Once made, the election cannot be revoked.
Important: The amount of the credit determined for lines 2
and 3 below with respect to alcohol in qualified mixtures
must be reduced by the excise tax benefit for qualified
methanol or ethanol fuel reflected on Form 720. See sections
40(c) and 4041(b)(2).

1
I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
FORM 6478, PAGE 3 of 4
MARGINS: TOP 13 mm (1⁄ 2 "), CENTER SIDES
PRINTS: HEAD to HEAD
PAPER: WHITE WRITING, SUB. 20.
INK: BLACK
FLAT SIZE: 407 mm (16") 3 279 mm (11"),
FOLD TO: 203 mm (8") 3 279 mm (11")
PERFORATE: ON FOLD

DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Form 6478 (2006)

Line 2

Page

Enter the number of gallons of alcohol that is less than 190
proof but at least 150 proof and alcohol that is less than 190
proof but at least 150 proof in qualified mixtures (mixtures of
alcohol and gasoline or alcohol and special fuels). For
alcohol other than ethanol, the rate is 45 cents per gallon.
Line 4

Line 12
Estate or trust. The credit on line 11 is allocated between the
estate or trust and the beneficiaries in proportion to the
income allocable to each.

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Enter the number of gallons of alcohol that is 190 proof or
greater and alcohol that is 190 proof or greater in qualified
mixtures (mixtures of alcohol and gasoline or alcohol and
special fuels). For alcohol other than ethanol, the rate is 60
cents per gallon.
Line 3

3

The total credit shown in column (c) on lines 1, 2, and 3, must
be included in income under “other income” on the applicable
line of your income tax return, even if you cannot use all of the
credit because of the tax liability limit. However, if you are
subject to the alternative minimum tax (AMT), this amount is
not income in computing AMT and must be subtracted when
figuring your alternative minimum taxable income. Do this by
including this amount on line 26 of Form 6251, line 23 of
Schedule I, Form 1041, or line 2o of Form 4626.
Line 5
Enter the amount of credit that was allocated to you as a
shareholder, partner, beneficiary, or patron.
If your credit from a pass-through entity includes the small
ethanol producer credit, you, as a shareholder, partner,
beneficiary, or patron, are subject to the 15-million-gallon
limitation for line 1 and the 30-million-gallon (60-million-gallon
for tax years ending after August 8, 2005) productive capacity
limitation for an eligible small ethanol producer. If you receive
a small ethanol producer credit from more than one entity,
your credit may be limited.
Line 6

If the credit includes the small ethanol producer credit, the
S corporation or partnership (other than an electing large
partnership) must provide the following additional information:
● The amount of the small ethanol producer credit included as
part of the pass-through credit;
● The number of gallons claimed at the entity level for the
small ethanol producer credit; and
● The productive capacity of the entity.
Line 7
Enter the amount included on line 6 that is from a passive
activity. Generally, a passive activity is a trade or business in
which you did not materially participate. Rental activities are
generally considered passive activities, whether or not you
materially participate. For details, see Form 8582-CR,
Passive Activity Credit Limitations (for individuals, trusts, and
estates), or Form 8810, Corporate Passive Activity Loss and
Credit Limitations (for corporations).

Cooperative election to allocate the small ethanol
producer credit to patrons. A cooperative described in
section 1381(a) can elect to allocate any part of the small
ethanol producer credit to patrons of the cooperative. The
credit is allocated among the patrons eligible to share in
patronage dividends on the basis of the quantity or value of
business done with or for the patrons for the tax year.
To make an election, attach a statement to your timely filed
return (including extensions) indicating the amounts you would
report in columns (a) and (c) on line 1 of Form 6478 without an
election, the amounts you are electing to allocate to patrons,
and the amounts that will not be allocated.
If you timely filed your return without making an election,
you can still make the election by filing an amended return
within 6 months of the due date of the return (excluding
elections). Write “Filed pursuant to section 301.9100-2” on the
amended return.
If the credit includes the small ethanol producer credit, the
estate or trust must provide the following additional
information:
● The amount of the small ethanol producer credit included as
part of the pass-through credit;
● The number of gallons claimed by the estate or trust for the
small ethanol producer credit; and
● The productive capacity of the estate or trust.

Part II. Allowable Credit
The credit allowed for the current year may be limited based
on your tax liability. Use Part II to figure the allowable credit.
However, if you have a current year credit and a credit from
Section B of Form 8835, Renewable Electricity and Refined
Coal Production Credit, do not complete Part II. Instead, go to
Form 8835 to compute the allowable combined credit.
Line 14
Enter the regular tax before credits from the following line of
the appropriate form or schedule.
● Individuals: Form 1040, line 44.
● Corporations: Form 1120, Schedule J, line 3; Form 1120-A,
Part I, line 1; or the applicable line of your return.
● Estates and trusts: The sum of the amounts from Form
1041, Schedule G, lines 1a and 1b; or the amount from the
applicable line of your return.
Line 15
Enter the alternative minimum tax (AMT) from the following line
of the appropriate form or schedule.
● Individuals: Form 6251, line 35.
● Corporations: Form 4626, line 14.
● Estates and trusts: Form 1041, Schedule I, line 56.

Line 9

Line 20

Enter the passive activity credit allowed for the 2006 credit
for alcohol used as fuel from Form 8582-CR or Form 8810.

See section 38(c)(5) for special rules that apply to married
couples filing separate returns, controlled corporate groups,
regulated investment companies, real estate investment
trusts, and estates and trusts.

Line 10
Use only if you amend your 2006 return to carry back an
unused credit from 2007.

1
I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
FORM 6478, PAGE 4 of 4
MARGINS: TOP 13 mm (1⁄ 2 "), CENTER SIDES
PRINTS: HEAD to HEAD
PAPER: WHITE WRITING, SUB. 20.
INK: BLACK
FLAT SIZE: 407 mm (16") 3 279 mm (11"),
FOLD TO: 203 mm (8") 3 279 mm (11")
PERFORATE: ON FOLD

DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Form 6478 (2006)

Line 22

Page

● The amount from the last line of any single separate
general business credit form.
Line 24

You are not required to provide the information requested
on a form that is subject to the Paperwork Reduction Act
unless the form displays a valid OMB control number. Books
or records relating to a form or its instructions must be
retained as long as their contents may become material in the
administration of any Internal Revenue law. Generally, tax
returns and return information are confidential, as required by
section 6103.
The time needed to complete and file this form will vary
depending on individual circumstances. The estimated
burden for individual taxpayers filing this form is approved
under OMB control number 1545-0074 and is included in the
estimates shown in the instructions for their individual
income tax return. The estimated burden for all other
taxpayers who file this form is shown below.

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Enter the amount of all other allowed credits for the current
year included in the general business credit. If you are filing
Form 3800, enter the amount from line 22 of that form plus the
following.
● Form 8844, line 24.

If you cannot use all of the credit because of the tax liability
limit, you cannot carry the unused credit back. You can carry
the unused credit forward up to 20 years.

Paperwork Reduction Act Notice. We ask for the
information on this form to carry out the Internal Revenue laws
of the United States. You are required to give us the
information. We need it to ensure that you are complying with
these laws and to allow us to figure and collect the right
amount of tax.

4

Recordkeeping
X hr., XX min.
Learning about the
law or the form
XX min.
Preparing and sending the form
to the IRS
XX min.
If you have comments concerning the accuracy of these
time estimates or suggestions for making this form simpler,
we would be happy to hear from you. See the instructions for
the tax return with which this form is filed.

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