Providing Alternative fuel and Infrastructure Tax Credits for 2014
The incentive that originally expired on December 31, 2013, has been retroactively extended through December 31, 2014, by H.R. 5771, 2014.
With the signing of the Bill into Law, by President Obama, the tax incentive is available for alternative fuel that is sold for use or used as a fuel to operate a motor vehicle. A tax credit in the amount of $0.50 per gallon is available for the following alternative fuels: compressed natural gas (based on 121 cubic feet), liquefied natural gas, liquefied petroleum gas, P-Series fuel, liquid fuel derived from coal through the Fischer-Tropsch process, and compressed or liquefied gas derived from biomass.
For an entity to be eligible to claim the credit they must be liable for reporting and paying the federal excise tax on the sale or use of the fuel in a motor vehicle. Tax exempt entities such as state and local governments that dispense qualified fuel from an on-site fueling station for use in vehicles qualify for the incentive. Eligible entities must be registered with the Internal Revenue Service (IRS).
The incentive must first be taken as a credit against the entity’s alternative fuel tax liability; any excess over this fuel tax liability may be claimed as a direct payment from the IRS. The tax credit is not allowed if an incentive for the same alternative fuel is also determined under the rules for the ethanol or biodiesel tax credits. This tax credit is applicable to fuel sold or used between January 1, 2005, and December 31, 2014. For more information about claiming the credit, see IRS Publication 510(PDF) and IRS Forms 637, 720, 4136, and 8849, which are available on the IRS Forms and Publications website. (Reference H.R. 5771, 2014; Public Law 112-240; and 26 U.S. Code 6426)
Point of Contact
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In addition to the Alternative Fuel Tax Credit, the Alternative Fuel Infrastructure Tax Credit, that originally expired on December 31, 2013, was also retroactively extended through December 31, 2014, by H.R. 5771, 2014.
Fueling equipment for natural gas, liquefied petroleum gas (propane), electricity, E85, or diesel fuel blends containing a minimum of 20% biodiesel installed between January 1, 2006, and December 31, 2013, is eligible for a tax credit of 30% of the cost, not to exceed $30,000. Permitting and inspection fees are not included in covered expenses. Fueling station owners who install qualified equipment at multiple sites are allowed to use the credit towards each location. Consumers who purchased qualified residential fueling equipment prior to December 31, 2014, may receive a tax credit of up to $1,000.
Unused credits that qualify as general business tax credits, as defined by the Internal Revenue Service (IRS), may be carried backward one year and carried forward 20 years.
For more information about claiming the credit, see IRS Form 8911, which is available on the IRS Forms and Publications website. (Reference H.R. 5771, 2014; Public Law 112-240; 26 U.S. Code 30C and 38; and IRS Notice 2007-43(PDF))