Form 8864 Biodiesel and Renewable Diesel Fuels Credit

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Form

8864

Biodiesel and Renewable Diesel Fuels Credit
▶

Department of the Treasury
Internal Revenue Service

Name(s) shown on return

OMB No. 1545-1924

2011

Attachment
Sequence No. 141

Attach to your tax return.

Identifying number

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You cannot claim any amounts on Form 8864 that you claimed (or will claim) on Form 720 (Schedule C), Form 8849, or
Form 4136.
Claimant has a certificate from the producer or importer of biodiesel or renewable diesel reported on lines 1 through 6 below and, if
applicable, claimant also has a statement from the reseller. Claimant has no reason to believe that the information in the certificate or
statement is false. Claimant may need to attach a copy of the certificate and statement. See Certification below.
Caution.

(a)
Number of Gallons
Sold or Used

Type of Fuel

Biodiesel (other than agri-biodiesel) . . . . . . . . .
Agri-biodiesel . . . . . . . . . . . . . . . .
Renewable diesel . . . . . . . . . . . . . . .
Biodiesel (other than agri-biodiesel) included in a biodiesel
mixture . . . . . . . . . . . . . . . . . .

1
2
3

$1.00
$1.00
$1.00

4

$1.00

5

Agri-biodiesel included in a biodiesel mixture .

.

.

5

$1.00

6

Renewable diesel included in a renewable diesel mixture .

.

6

$1.00

7
8
9

Qualified agri-biodiesel production . . . . . . . . .
$ .10
7
Add lines 1 through 7. Include this amount in your income for 2011 (see instructions) . . . . .
Biodiesel and renewable diesel fuels credit from partnerships, S corporations, cooperatives,
estates, and trusts (see instructions) . . . . . . . . . . . . . . . . . . . . .

1
2
3
4

10

11
12

.

.

.

(c)

(b)
Rate

Add lines 8 and 9. Cooperatives, estates, and trusts, go to line 11. Partnership and
S corporations, report this amount on Schedule K. All others, report this amount on Form 3800,
line 1l . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amount allocated to patrons of the cooperative or beneficiaries of the estate or trust (see
instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cooperatives, estates, and trusts, subtract line 11 from line 10. Report this amount on Form 3800,
line 1l . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Column (a) x Column (b)

8
9

10
11
12

General Instructions

Definitions and Special Rules

Section references are to the Internal Revenue Code.

Certification
To claim a credit on lines 1 through 6, you generally must
attach the Certificate for Biodiesel and, if applicable,
Statement of Biodiesel Reseller, to Form 8864. To claim a
credit on lines 3 or 6, the certificate must indicate at all
appropriate locations that the fuel to which it relates is
renewable diesel and state that the fuel meets the
requirements discussed under Renewable Diesel on
page 2. However, if the certificate or statement was
attached to a previously filed claim, attach a statement
with the following information.
• Certificate identification number.
• Total gallons of agri-biodiesel, biodiesel other than
agri-biodiesel, or renewable diesel on the certificate.
• Total gallons claimed on Schedule 3 (Form 8849).
• Total gallons claimed on Schedule C (Form 720).
• Total gallons claimed on Form 4136.
See Notice 2005-62, 2005-35 I.R.B. 443, or Pub. 510,
Excise Taxes, for the model certificate and statement.

What’s New
• The biodiesel and renewable diesel fuels credit is
scheduled to expire for fuel sold or used after 2011. Do
not report this fuel on Form 8864 unless the credit is
extended. See www.irs.gov/form8864 for the latest
information about this credit.

Purpose of Form
Use Form 8864 to figure your biodiesel and renewable
diesel fuels credit. Claim the credit for the tax year in
which the sale or use occurs. This credit consists of the:
• Biodiesel credit,
• Renewable diesel credit,
• Biodiesel mixture credit,
• Renewable diesel mixture credit, and
• Small agri-biodiesel producer credit.

For Paperwork Reduction Act Notice, see instructions.

Cat. No. 25778F

Form 8864 (2011)

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Form 8864 (2011)

Biodiesel
Biodiesel means the monoalkyl esters of long chain fatty
acids derived from plant or animal matter which meet the
registration requirements for fuels and fuel additives
established by the Environmental Protection Agency
(EPA) under section 211 of the Clean Air Act, and the
requirements of the American Society of Testing and
Materials (ASTM) D6751.
Biodiesel includes both agri-biodiesel and biodiesel
other than agri-biodiesel. Biodiesel does not include:
• Fuel produced outside the United States or a U.S.
possession for use as a fuel outside the United States or
a U.S. possession.
• Any liquid that is eligible for the alcohol and cellulosic
biofuel fuels credit (Form 6478).

Caution. You may be liable for a 24.4 cents per gallon
excise tax on biodiesel or renewable diesel you sold (in
your trade or business) for use or used in a dieselpowered highway vehicle or diesel-powered train. Report
the tax liability on Form 720 on the line for IRS No. 79 for
the quarter in which the biodiesel was sold or used or IRS
No. 60(b) for the quarter in which the renewable diesel
was sold or used.

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Agri-Biodiesel
Agri-biodiesel means biodiesel derived solely from virgin
oils, including esters derived from virgin vegetable oils
from corn, soybeans, sunflower seeds, cottonseeds,
canola, crambe, rapeseeds, safflowers, flaxseeds, rice
bran, mustard seeds, and camelina, and from animal fats.
Renewable Diesel
Renewable diesel means liquid fuel derived from biomass
(defined below) that meets the registration requirements
for fuels and fuel additives established by the EPA under
section 211 of the Clean Air Act, and the requirements of
the ASTM D975 or D396, or other equivalent standard
approved by the IRS, or a Department of Defense
specification for military jet fuel or an ASTM specification
for aviation turbine fuel. For aviation uses, treat kerosene
as diesel fuel when figuring a renewable diesel mixture
credit.
Renewable diesel does not include:
• Fuel produced outside the United States or a U.S.
possession for use as a fuel outside the United States or
a U.S. possession.
• Any fuel derived from co-processing biomass with
feedstock that is not biomass.
• Any liquid eligible for the alcohol and cellulosic biofuel
fuels credit (Form 6478).
Biomass. Biomass means any organic material other
than oil and natural gas (or any product thereof) and coal
(including lignite) or any product thereof.
Biodiesel and Renewable Diesel Credits
The biodiesel or renewable diesel reported on lines 1
through 3 must not be a mixture. The credits are for
biodiesel or renewable diesel 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 fuel used in a trade or
business that was purchased in a retail sale described
above.

Biodiesel and Renewable Diesel Mixture Credits
The biodiesel or renewable diesel reported on lines 4
through 6 must be used to make a qualified mixture. A
qualified mixture combines biodiesel or renewable diesel
with diesel fuel (defined below), determined without
regard to any use of kerosene. But treat the kerosene as
diesel fuel when figuring a renewable diesel mixture credit
for certain aviation fuel (see Renewable Diesel above).
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 of 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.
Caution. You may be liable for a 24.4 cents per gallon
excise tax on biodiesel or renewable diesel used to
produce blended taxable fuel outside the bulk transfer
terminal system if the mixture is diesel fuel. Report the tax
liability on Form 720 on the line for IRS No. 60(c) for the
quarter in which the mixture was sold or used.
Diesel fuel. Diesel fuel means:
• Any liquid that, without further processing or blending,
is suitable for use as a fuel in a diesel-powered highway
vehicle or diesel-powered train, and
• Transmix.
A liquid is suitable for this use if the liquid has practical
and commercial fitness for use in the propulsion engine of
a diesel-powered highway vehicle or diesel-powered
train. A liquid may possess this practical and commercial
fitness even though the specified use is not the liquid’s
predominant use. However, a liquid does not possess this
practical and commercial fitness solely by reason of its
possible or rare use as a fuel in the propulsion engine of a
diesel-powered highway vehicle or diesel-powered train.
Diesel fuel does not include gasoline, kerosene, excluded
liquid, No. 5 and No. 6 fuel oils covered by ASTM
specification D396, or F-76 (Fuel Naval Distillate) covered
by military specification MIL-F-16884.
An excluded liquid is any liquid that (a) contains less
than 4% normal paraffins, or (b) has a (i) distillation range
of 125° F or less, (ii) sulfur content of 10 parts per million
or less, and (iii) minimum color of +27 Saybolt. For
example, biodiesel is always an excluded liquid because
it does not contain paraffins. But a biodiesel mixture may
not be an excluded liquid.

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Form 8864 (2011)

Transmix means a by-product of refined products
created by the mixing of different specification products
during pipeline transportation.

Recapture of Credit
You must pay a tax on each gallon of biodiesel or
renewable diesel on which a credit was claimed at the
rate used to figure the credit if you:
• Use it (including a mixture) other than as a fuel,
• Buy it at retail and use it to create a mixture,
• Separate it from a mixture, or
• Use agri-biodiesel on which the small agri-biodiesel
producer credit was claimed for a use not described
under Qualified Agri-Biodiesel Production above.
Report the tax on Form 720, Quarterly Federal Excise
Tax Return.

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Qualified Agri-Biodiesel Production
Qualified agri-biodiesel production means up to 15 million
gallons of agri-biodiesel which is produced by an eligible
small agri-biodiesel producer (defined below), and which
during the tax year:
1. Is sold by such producer to another person:
a. For use by such person in the production of a
qualified biodiesel mixture in such other person’s trade or
business (other than casual off-farm production),
b. For use by such person as a fuel in a trade or
business, or
c. Who sells such agri-biodiesel at retail to another
person and places such agri-biodiesel in the fuel tank of
such other person, or
2. Is used or sold by such producer for any purpose
described in (1).
Note. Production of renewable diesel is not qualified agribiodiesel production.
Eligible small agri-biodiesel producer. An eligible small
agri-biodiesel producer is a person who, at all times
during the tax year, has a productive capacity for agribiodiesel not in excess of 60 million gallons.
Aggregation rule. All members of the same controlled
group of corporations (see section 267(f)) and all persons
under common control (see section 52(b) but treat an
interest of more than 50% as a controlling interest) are
treated as 1 person for purposes of the 15 and 60 million
gallon limits.
Partnership, S corporation, and other pass-through
entities. The 15 and 60 million gallon limits discussed
above are applied at both the entity level and at the
partner or similar level.
Registration
All producers and importers of biodiesel or renewable
diesel must be registered with the IRS. All persons
producing blended taxable fuel must be registered. 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 amount
of biodiesel or renewable diesel. If any amount is claimed
(or will be claimed) with respect to any amount of
biodiesel or renewable diesel 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
8864 for that amount of biodiesel or renewable diesel.

Additional Information
See Pub. 510, Excise Taxes.

Specific Instructions

Use lines 1 through 8 to figure any biodiesel and
renewable diesel fuels credit from your own trade or
business.
Skip lines 1 through 8 if you are claiming only a credit
that was allocated to you from a pass-through entity (that
is, an S corporation, partnership, estate, trust, or
cooperative).
Line 8
Include this amount 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 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 27 of Form 6251, line 23 of Schedule I
(Form 1041), or line 2o of Form 4626.
Line 9
If you are allocated a small agri-biodiesel producer credit
from a pass-through entity, the entity must tell you the
number of gallons for which it claimed the credit and its
productive capacity for agri-biodiesel. You, as a
shareholder, partner, beneficiary, or patron, are subject to
the 15 million gallon limitation for line 7 and the 60 million
gallon productive capacity limitation for an eligible small
agri-biodiesel producer.
Line 11
A cooperative, estate, or trust allocating the small agribiodiesel credit must give the patron or beneficiary a
statement providing them with the number of gallons for
which it claimed the credit and its productive capacity for
agri-biodiesel. An estate or trust must also provide the
amount of the small agri-biodiesel credit included as part
of the pass-through credit. See the above instructions for
line 9.

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Form 8864 (2011)

Cooperatives. A cooperative described in section
1381(a) can elect to allocate any part of the small agribiodiesel producer credit among the 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 such
patrons for the tax year.
The cooperative is deemed to have made the election
by completing line 11. However, the election is not
effective unless (a) made on a timely filed return (including
extensions) and (b) the organization designates the
apportionment in a written notice mailed to its patrons
during the payment period described in section 1382(d).
If you timely file 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). Enter “Filed pursuant to section
301.9100-2” on the amended return.
Once made, the election cannot be revoked.
Estates and trusts. Allocate the biodiesel and renewable
diesel fuels credit on line 10 between the estate or trust
and the beneficiaries in the same proportion as income
was allocated and enter the beneficiaries’ share on line
11.

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., 36 min.
Learning about the
law or the form . . . . . . . . . . . . 57 min.
Preparing and sending the form
to the IRS . . . . . . . . . . . . 2 hrs., 20 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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