U.S. Individual Income Tax Return

Form

6478

OMB No. 1545-0231

Alcohol and Cellulosic Biofuel Fuels Credit
©

Department of the Treasury
Internal Revenue Service

2008
Attachment
Sequence No.

Attach to your tax return.

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.
(a)
Number of Gallons
Sold or Used

Type of Fuel

1
2
3
4

5

6
7
8
9
10
11
12
13
14
15
16
17

Qualified ethanol fuel production (see instructions for
election)
Alcohol 190 proof or greater and alcohol 190 proof or greater
in fuel mixtures sold or used before 2009
Alcohol 190 proof or greater and alcohol 190 proof or greater
in fuel mixtures sold or used after 2008
Alcohol less than 190 proof but at least 150 proof and alcohol
less than 190 proof but at least 150 proof in fuel mixtures
sold or used before 2009

(b)
Rate

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

1

$.10

2

$.51*

3

$.45*

4

$.3778*

Alcohol less than 190 proof but at least 150 proof and alcohol
less than 190 proof but at least 150 proof in fuel mixtures
$.3333*
5
sold or used after 2008
Qualified cellulosic biofuel produced, and sold or used, after
$.41**
6
2008 that is alcohol (see instructions for election)
Qualified cellulosic biofuel produced, and sold or used, after
7
$1.01
2008 that is not alcohol (see instructions for election)
Add the amounts in column (c) on lines 1 through 7. Include this amount in your income for 2008
8
(see instructions)
Alcohol and cellulosic biofuel fuels credit from a partnership, S corporation, cooperative, estate,
9
or trust (see instructions)
Add lines 8 and 9. Partnerships and S corporations, report this amount on Schedule K. All others,
10
go to line 11
Alcohol and cellulosic biofuel fuels credit included on line 10 from passive activities (see
11
instructions)
12
Subtract line 11 from line 10
13
Alcohol and cellulosic biofuel fuels credit allowed for 2008 from a passive activity (see instructions)
Carryforward from 2007 of the alcohol fuel credit and carryback from 2009 of the alcohol and
14
cellulosic biofuel fuels credit (see instructions)
Add lines 12 through 14. Cooperatives, estates, and trusts, go to line 16. All others, report this
15
amount on Form 3800, line 29c
Amount allocated to patrons of the cooperative or beneficiaries of the estate or trust (see
instructions)
Cooperatives, estates, and trusts. Subtract line 16 from line 15. Report this amount on Form
3800, line 29c

16
17

*Only the rate for ethanol is shown. See instructions for the rate for alcohol other than ethanol.
**Only the rate for alcohol other than ethanol is shown. See instructions for the rate for ethanol.

General Instructions
Section references are to the Internal Revenue Code
unless otherwise noted.

What’s New
The Food, Conservation, and Energy Act of 2008 made
the following changes.
● The Act lowered the credit rate for ethanol sold or
used after 2008.
● The Act added the cellulosic biofuel producer credit
for fuel produced, and sold or used, after 2008.

For Paperwork Reduction Act Notice, see instructions.

● The Act lowered the percentage of denaturants
included in the volume of alcohol used to figure the
credit for fuel sold or used after 2008.
The Energy Improvement and Extension Act of 2008
added a clarification that credits for fuel are designed
to provide an incentive for U.S. production.

Purpose of Form
Use Form 6478 to figure your alcohol and cellulosic
biofuel fuels credit. You claim the credit for the tax
year in which the sale or use occurs. This credit
consists of the:
● Alcohol mixture credit,
Cat. No. 13605J

Form

6478

(2008)

Form 6478 (2008)

● Alcohol credit,
● Small ethanol producer credit, and
● Cellulosic biofuel producer credit.
You may claim or elect not to claim the alcohol and
cellulosic biofuel fuels 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.
Before claiming a credit on Form 6478, the
alcohol fuel mixture credit must be taken
against any section 4081 liability on Form
CAUTION
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
This is ethanol produced by an eligible small ethanol
producer (defined below) which during the tax year:
1. Does not exceed 15 million gallons (not counting
any qualified cellulosic biofuel production);
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.
Eligible Small Ethanol Producer
This is a person who, at all times during the tax year,
has a productive capacity for alcohol of 60 million
gallons or less. 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% (2% for fuel sold or used after 2008—see Notice
2009-6 in I.R.B. 2009-3 for details) of the volume of the
alcohol and denaturant combined.
● Alcohol produced outside the United States or a U.S.
possession for use as a fuel outside the United States
or a U.S. possession (for credits claimed on returns
filed after May 14, 2008).
The alcohol must not be a mixture with gasoline or a
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

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2

● 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.
Alcohol Fuel Mixture
The alcohol must be used to make a qualified mixture.
A qualified alcohol mixture combines alcohol with
gasoline or a 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.
Qualified Cellulosic Biofuel Fuel Production
This is cellulosic biofuel produced, and sold or used,
after 2008, and during the tax year:
1. Is sold by the producer to another person—
● For use by the buyer in the buyer’s trade or business
to produce a qualified cellulosic biofuel mixture (other
than casual off-farm production),
● For use by the buyer as a fuel in a trade or business,
or
● Who sells the cellulosic biofuel at retail to another
person and puts the cellulosic biofuel in the retail
buyer’s fuel tank;
2. Is used or sold by the producer for any purpose
described in 1 above.
Qualified cellulosic fuel production does not include
purchasing alcohol and increasing the proof of the
alcohol through additional distillation. Nor does it include
cellulosic biofuel that is not both produced in the United
States or a U.S. possession and used as a fuel in the
United States or a U.S. possession.
A qualified cellulosic biofuel mixture combines
cellulosic biofuel with gasoline or a special fuel. The
producer of the mixture either:
● Used it as a fuel, or
● Sold it as fuel to another person.
Cellulosic Biofuel
Cellulosic biofuel, for credit purposes, is any liquid fuel
produced, and sold or used, after 2008, which:
● Is produced from any lignocellulosic or
hemicellulosic matter that is available on a renewable
or recurring basis, and
● Meets the registration requirements for fuels and fuel
additives established by the Environmental Protection
Agency under section 211 of the Clean Air Act (42
U.S.C. 7545), and
● Is not alcohol of less than 150 proof. In figuring the
proof of any alcohol, disregard any added denaturants
(additives that make the alcohol unfit for human
consumption).

Form 6478 (2008)

Registration
All producers and importers of alcohol with a proof of
at least 190 and all producers of cellulosic biofuel 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 Form 6478. 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 or Qualified
Cellulosic Biofuel Production.
Report the tax on Form 720.

Specific Instructions
Use lines 1 through 7 to figure any alcohol and
cellulosic biofuel fuels credit from your own trade or
business.
Note. We have shown in column (b) of lines 2 through
5 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
through 5.
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. Multiply by the rate
of 10 cents per gallon.
Important: The amount of the credit determined for
lines 2 through 5 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).
Lines 2 and 3
Enter the number of gallons of alcohol 190 proof or
greater and alcohol 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.
Lines 4 and 5
Enter the number of gallons of alcohol less than 190
proof but at least 150 proof and alcohol 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.

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3

Line 6
Enter the number of gallons of cellulosic biofuel that is
alcohol produced, and sold or used, after 2008 that
meet the conditions listed under Qualified Cellulosic
Biofuel Production on page 2. For ethanol, the rate is
46 cents per gallon.
Line 7
Enter the number of gallons of cellulosic biofuel that is
not alcohol produced, and sold or used, after 2008
that meet the conditions listed under Qualified
Cellulosic Biofuel Production on page 2. Multiply by
the rate of $1.01 per gallon.
Line 8
The total credit shown in column (c) on lines 1 through
7, 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 figuring AMT and must be subtracted when
figuring your alternative minimum taxable income. Do
this by including this amount on line 27 of Form 6251,
line 23 of Schedule I (Form 1041), or line 2o of Form
4626.
Line 9
Enter the amount of credit that was allocated to you as
a partner, shareholder, patron, or beneficiary.
If your credit from a pass-through entity includes the
small ethanol producer credit, you, as a partner,
shareholder, patron, or beneficiary, are subject to the
15-million-gallon limitation for line 1 and the
60-million-gallon 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 10
If the credit includes the small ethanol producer credit,
the partnership (other than an electing large
partnership) or S corporation 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 11
Enter the amount included on line 10 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).
Line 13
Enter the passive activity credit allowed for the 2008
alcohol and cellulosic biofuel fuels credit from Form
8582-CR or Form 8810.

Form 6478 (2008)

Line 14
Carryforward. Use line 14 to show any carryforward of
the credit from 2007. For carryforwards of the credit
from years prior to 2005, show such carryforwards on
line 6 of Form 3800.
Carryback. Use line 14 to show any carryback if you
amend your 2008 return to carry back an unused credit
from 2009.
Line 16
Estate or trust. Allocate the alcohol and cellulosic
biofuel fuels credit on line 15 between the estate or
trust and the beneficiaries in the same proportion as
income was allocated and enter the beneficiaries’
share on line 16.
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.
Cooperative election to allocate the small ethanol
producer credit or the cellulosic biofuel producer
credit to patrons. A cooperative described in section
1381(a) can elect to allocate any part of the small
ethanol producer credit or the cellulosic biofuel
producer credit to patrons of the cooperative. To make
the election, attach a statement to the effect that the
cooperative elects to allocate the credit pro rata
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.
The election is not effective unless:
● The statement described above is attached to the
timely filed tax return (including extensions) for the tax
year associated with the election.
● The cooperative designates the apportionment in a
written notice mailed to its patrons during the payment
period described in section 1382(d).
A cooperative electing to allocate any part of the
small ethanol producer credit must also provide to its
patrons the following additional information:

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● The number of gallons claimed by the cooperative.
● The productive capacity of the cooperative.
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 extensions). Write “Filed pursuant to
section 301.9100-2” on the amended return.
Once made, the election cannot be revoked.
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.
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.
Recordkeeping
8 hrs., 7 mins.
Learning about the law or the form
35 mins.
Preparing and sending the form to the IRS 45
mins.
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.