Form 6478 Credit for Alcohol Used as Fuel

Form

6478

Alcohol and Cellulosic Biofuel Fuels Credit

Department of the Treasury
Internal Revenue Service

▶ Attach

OMB No. 1545-0231

2011

Attachment
Sequence No. 83

to your tax return.
Identifying number

Name(s) shown on return

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

(b)
Rate

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

Qualified ethanol fuel production for fuel sold or used before
$.10
2012 (see instructions for election) . . . . . . . . .
1
Alcohol 190 proof or greater and alcohol 190 proof or greater
$.45*
in fuel mixtures sold or used before 2012 . . . . . . .
2
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
$.3333*
or used before 2012 . . . . . . . . . . . . . .
3
Qualified cellulosic biofuel production for fuel sold or used
$.41**
before 2012 that is alcohol (see instructions for election) . .
4
Qualified cellulosic biofuel production for fuel sold or used
before 2012 that is not alcohol (see instructions for election) .
$1.01
5
Qualified cellulosic biofuel production for fuel sold or used
$1.01
after 2011 (see instructions for election) . . . . . . . .
6
Add the amounts in column (c) on lines 1 through 6. Include this amount in your income for 2011
and, if you reported an amount on lines 4, 5, or 6 above, enter your IRS registration number (see
instructions)
. . . . . . . . . . . . . . . . . .
7
Alcohol and cellulosic biofuel fuels credit from partnerships, S corporations, cooperatives, estates,
and trusts (see instructions) . . . . . . . . . . . . . . . . . . . . . . . .
8
Add lines 7 and 8. Cooperatives, estates, and trusts, go to line 10. Partnerships and S
corporations, stop here and report this amount on Schedule K. All others, stop here and report
this amount on Form 3800, line 4c . . . . . . . . . . . . . . . . . . . . .
9
Amount allocated to patrons of the cooperative or beneficiaries of the estate or trust (see
instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10
Cooperatives, estates, and trusts, subtract line 10 from line 9. Report this amount on Form 3800,
line 4c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11

*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 alcohol mixture, alcohol, and small ethanol producer
credits expired for fuels sold or used after 2011.
• The carryforwards, carrybacks, and passive activity
limitations for this credit are no longer reported on this form;
instead, they must be reported on Form 3800, General
Business Credit.
Future developments. The IRS has created a page on
IRS.gov for information about Form 6478 and its instructions
at www.irs.gov/form6478. Information about any future
developments affecting Form 6478 (such as legislation
enacted after we release it) will be posted on that page.

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:
For Paperwork Reduction Act Notice, see instructions.

• Alcohol mixture credit,
• 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 720. Any credit
CAUTION
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.

!
▲

Taxpayers, other than partnerships, S corporations,
cooperatives, estates, or trusts, whose only source of this
credit is from those pass-through entities, are not required to
complete or file this form. Instead, they can report this credit
directly on Form 3800.

Cat. No. 13605J

Form 6478 (2011)

Page 2

Form 6478 (2011)

Definitions and Special Rules
Qualified Ethanol Fuel Production

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.

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—

Qualified Cellulosic Biofuel Production

a. For use by the buyer in the buyer’s trade or business
to produce a qualified mixture (other than casual off-farm
production),
b. For use by the buyer as a fuel in a trade or business,
or
c. 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.

a. 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),
b. For use by the buyer as a fuel in a trade or business,
or
c. Who sells the cellulosic biofuel at retail to another
person and puts the cellulosic biofuel in the retail buyer’s
fuel tank; or

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 2% (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.
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
• 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.

This is cellulosic biofuel which during the tax year:
1. Is sold by the producer to another person—

2. Is used or sold by the producer for any purpose
described in (1) above.
Qualified cellulosic biofuel 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
Generally, cellulosic biofuel, for credit purposes, is any liquid
fuel, which:
• Is produced from any lignocellulosic or hemicellulosic
matter that is available on a renewable or recurring basis,
• 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).
However, cellulosic biofuel does not include any fuel if:
• More than 4% of the fuel (determined by weight) is any
combination of water and sediment,
• The ash content of the fuel is more than 1% (determined
by weight), or
• The fuel has an acid number greater than 25.

Registration
All producers and importers of alcohol with a proof of at
least 190 and all producers of cellulosic biofuel must be
registered by the IRS. See Form 637, Application for
Registration.

Page 3

Form 6478 (2011)

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 cellulosic
biofuel (or the alcohol or cellulosic biofuel in the mixture) at
the rate you used to figure the credit if you:
• Separate the alcohol from the mixture,
• Use the alcohol 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, earlier.
Report the tax on Form 720.

Specific Instructions
Note. Column (b) of lines 2 and 3 shows 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. Column (b) of line 4 shows the rate for alcohol
other than ethanol only. If you have a credit for ethanol, enter
in column (b) the rate shown in the instructions for line 4.

Line 1

Line 4
Enter the number of gallons of cellulosic biofuel that is
alcohol sold or used before 2012 that meets the conditions
listed under Qualified Cellulosic Biofuel Production, earlier.
For ethanol, the rate is 46 cents per gallon.

Line 5
Enter the number of gallons of cellulosic biofuel that is not
alcohol sold or used before 2012 that meets the conditions
listed under Qualified Cellulosic Biofuel Production, earlier.
Multiply by the rate of $1.01 per gallon.

Line 6
Enter the number of gallons of cellulosic biofuel sold or used
after 2011 that meets the conditions listed under Qualified
Cellulosic Biofuel Production, earlier. Multiply by the rate of
$1.01 per gallon.

Line 7
The total credit shown in column (c) on lines 1 through 6
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.
Registration number. To claim a cellulosic biofuel producer
credit on lines 4, 5, or 6, you must be registered with the
IRS. Enter your CB registration number in the space
provided. For more information, see Form 637 and
Publication 510, Excise Taxes.

Enter the number of gallons of ethanol, up to 15 million
gallons sold or used before 2012, that meet the conditions
listed under Qualified Ethanol Fuel Production, earlier.
Multiply by the rate of 10 cents per gallon.

Line 8

Important: The amount of the credit determined for lines 2
and 3 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).

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 2
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) sold or used before 2012. For alcohol other than
ethanol, the rate is 60 cents per gallon.

Line 3
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) sold or used before
2012. For alcohol other than ethanol, the rate is 45 cents per
gallon.

Enter the amount of credit that was allocated to you as a
partner, shareholder, patron of a cooperative, or beneficiary.

Line 9
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.

Form 6478 (2011)

Line 10
Estate or trust. Allocate the alcohol and cellulosic biofuel
fuels credit on line 9 between the estate or trust and the
beneficiaries in the same proportion as income was
allocated and enter the beneficiaries’ share on line 10.
If the estate or trust is subject to the passive activity rules,
include on line 8 any alcohol and cellulosic biofuel fuels
credits from passive activities disallowed for prior years and
carried forward to this year. Complete Form 8582-CR,
Passive Activity Credit Limitations, to determine the allowed
credit that must be allocated between the estate or trust and
the beneficiaries. For details, see the Instructions for Form
8582-CR.
If the credit includes the small ethanol producer credit, the
estate or trust must provide to its beneficiaries 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.
If the cooperative is subject to the passive activity rules,
include on line 8 any small ethanol or cellulosic biofuel
producers credits from passive activities disallowed for prior
years and carried forward to this year. Complete Form 8810,
Corporate Passive Activity Loss and Credit Limitations, to
determine the allowed producer credits that can be allocated
to patrons. For details, see the Instructions for Form 8810.
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).

Page 4

A cooperative electing to allocate any part of the small
ethanol producer credit must also provide to its patrons the
following additional information:
• 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 . . . . . . . . . . . 4 hr., 32 min.
Learning about the law or the form . . . . . 53 min.
Preparing and sending
the form to the IRS . . . . . . . . . . . . . 1 hr.
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.