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1040x Instructions For Dummies

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1040x Instructions For Dummies

1040x instructions for dummies 6. 1040x instructions for dummies   How To Figure Cost of Goods Sold Table of Contents Introduction Figuring Cost of Goods Sold on Schedule C, Lines 35 Through 42Line 35 Inventory at Beginning of Year Line 36 Purchases Less Cost of Items Withdrawn for Personal Use Line 37 Cost of Labor Line 38 Materials and Supplies Line 39 Other Costs Line 40 Add Lines 35 through 39 Line 41 Inventory at End of Year Line 42 Cost of Goods Sold Introduction If you make or buy goods to sell, you can deduct the cost of goods sold from your gross receipts on Schedule C. 1040x instructions for dummies However, to determine these costs, you must value your inventory at the beginning and end of each tax year. 1040x instructions for dummies This chapter applies to you if you are a manufacturer, wholesaler, or retailer or if you are engaged in any business that makes, buys, or sells goods to produce income. 1040x instructions for dummies This chapter does not apply to a personal service business, such as the business of a doctor, lawyer, carpenter, or painter. 1040x instructions for dummies However, if you work in a personal service business and also sell or charge for the materials and supplies normally used in your business, this chapter applies to you. 1040x instructions for dummies If you must account for an inventory in your business, you must generally use an accrual method of accounting for your purchases and sales. 1040x instructions for dummies For more information, see chapter 2. 1040x instructions for dummies Figuring Cost of Goods Sold on Schedule C, Lines 35 Through 42 Figure your cost of goods sold by filling out lines 35 through 42 of Schedule C. 1040x instructions for dummies These lines are reproduced below and are explained in the discussion that follows. 1040x instructions for dummies 35 Inventory at beginning of year. 1040x instructions for dummies If different from last year's closing inventory, attach explanation   36 Purchases less cost of items withdrawn for personal use   37 Cost of labor. 1040x instructions for dummies Do not include any amounts paid to yourself   38 Materials and supplies   39 Other costs   40 Add lines 35 through 39   41 Inventory at end of year   42 Cost of goods sold. 1040x instructions for dummies Subtract line 41 from line 40. 1040x instructions for dummies  Enter the result here and on line 4   Line 35 Inventory at Beginning of Year If you are a merchant, beginning inventory is the cost of merchandise on hand at the beginning of the year that you will sell to customers. 1040x instructions for dummies If you are a manufacturer or producer, it includes the total cost of raw materials, work in process, finished goods, and materials and supplies used in manufacturing the goods (see Inventories in chapter 2). 1040x instructions for dummies Opening inventory usually will be identical to the closing inventory of the year before. 1040x instructions for dummies You must explain any difference in a schedule attached to your return. 1040x instructions for dummies Donation of inventory. 1040x instructions for dummies   If you contribute inventory (property that you sell in the course of your business), the amount you can claim as a contribution deduction is the smaller of its fair market value on the day you contributed it or its basis. 1040x instructions for dummies The basis of donated inventory is any cost incurred for the inventory in an earlier year that you would otherwise include in your opening inventory for the year of the contribution. 1040x instructions for dummies You must remove the amount of your contribution deduction from your opening inventory. 1040x instructions for dummies It is not part of the cost of goods sold. 1040x instructions for dummies   If the cost of donated inventory is not included in your opening inventory, the inventory's basis is zero and you cannot claim a charitable contribution deduction. 1040x instructions for dummies Treat the inventory's cost as you would ordinarily treat it under your method of accounting. 1040x instructions for dummies For example, include the purchase price of inventory bought and donated in the same year in the cost of goods sold for that year. 1040x instructions for dummies   A special rule may apply to certain donations of food inventory. 1040x instructions for dummies See Publication 526, Charitable Contributions. 1040x instructions for dummies Example 1. 1040x instructions for dummies You are a calendar year taxpayer who uses an accrual method of accounting. 1040x instructions for dummies In 2013, you contributed property from inventory to a church. 1040x instructions for dummies It had a fair market value of $600. 1040x instructions for dummies The closing inventory at the end of 2012 properly included $400 of costs due to the acquisition of the property, and in 2012, you properly deducted $50 of administrative and other expenses attributable to the property as business expenses. 1040x instructions for dummies The charitable contribution allowed for 2013 is $400 ($600 − $200). 1040x instructions for dummies The $200 is the amount that would be ordinary income if you had sold the contributed inventory at fair market value on the date of the gift. 1040x instructions for dummies The cost of goods sold you use in determining gross income for 2013 must not include the $400. 1040x instructions for dummies You remove that amount from opening inventory for 2013. 1040x instructions for dummies Example 2. 1040x instructions for dummies If, in Example 1, you acquired the contributed property in 2013 at a cost of $400, you would include the $400 cost of the property in figuring the cost of goods sold for 2013 and deduct the $50 of administrative and other expenses attributable to the property for that year. 1040x instructions for dummies You would not be allowed any charitable contribution deduction for the contributed property. 1040x instructions for dummies Line 36 Purchases Less Cost of Items Withdrawn for Personal Use If you are a merchant, use the cost of all merchandise you bought for sale. 1040x instructions for dummies If you are a manufacturer or producer, this includes the cost of all raw materials or parts purchased for manufacture into a finished product. 1040x instructions for dummies Trade discounts. 1040x instructions for dummies   The differences between the stated prices of articles and the actual prices you pay for them are called trade discounts. 1040x instructions for dummies You must use the prices you pay (not the stated prices) in figuring your cost of purchases. 1040x instructions for dummies Do not show the discount amount separately as an item in gross income. 1040x instructions for dummies   An automobile dealer must record the cost of a car in inventory reduced by any manufacturer's rebate that represents a trade discount. 1040x instructions for dummies Cash discounts. 1040x instructions for dummies   Cash discounts are amounts your suppliers let you deduct from your purchase invoices for prompt payments. 1040x instructions for dummies There are two methods of accounting for cash discounts. 1040x instructions for dummies You can either credit them to a separate discount account or deduct them from total purchases for the year. 1040x instructions for dummies Whichever method you use, you must be consistent. 1040x instructions for dummies If you want to change your method of figuring inventory cost, you must file Form 3115, Application for Change in Accounting Method. 1040x instructions for dummies For more information, see Change in Accounting Method in chapter 2. 1040x instructions for dummies   If you credit cash discounts to a separate account, you must include this credit balance in your business income at the end of the tax year. 1040x instructions for dummies If you use this method, do not reduce your cost of goods sold by the cash discounts. 1040x instructions for dummies Purchase returns and allowances. 1040x instructions for dummies   You must deduct all returns and allowances from your total purchases during the year. 1040x instructions for dummies Merchandise withdrawn from sale. 1040x instructions for dummies   If you withdraw merchandise for your personal or family use, you must exclude this cost from the total amount of merchandise you bought for sale. 1040x instructions for dummies Do this by crediting the purchases or sales account with the cost of merchandise you withdraw for personal use. 1040x instructions for dummies You must also charge the amount to your drawing account. 1040x instructions for dummies   A drawing account is a separate account you should keep to record the business income you withdraw to pay for personal and family expenses. 1040x instructions for dummies As stated above, you also use it to record withdrawals of merchandise for personal or family use. 1040x instructions for dummies This account is also known as a “withdrawals account” or “personal account. 1040x instructions for dummies ” Line 37 Cost of Labor Labor costs are usually an element of cost of goods sold only in a manufacturing or mining business. 1040x instructions for dummies Small merchandisers (wholesalers, retailers, etc. 1040x instructions for dummies ) usually do not have labor costs that can properly be charged to cost of goods sold. 1040x instructions for dummies In a manufacturing business, labor costs properly allocable to the cost of goods sold include both the direct and indirect labor used in fabricating the raw material into a finished, saleable product. 1040x instructions for dummies Direct labor. 1040x instructions for dummies   Direct labor costs are the wages you pay to those employees who spend all their time working directly on the product being manufactured. 1040x instructions for dummies They also include a part of the wages you pay to employees who work directly on the product part time if you can determine that part of their wages. 1040x instructions for dummies Indirect labor. 1040x instructions for dummies   Indirect labor costs are the wages you pay to employees who perform a general factory function that does not have any immediate or direct connection with making the saleable product, but that is a necessary part of the manufacturing process. 1040x instructions for dummies Other labor. 1040x instructions for dummies   Other labor costs not properly chargeable to the cost of goods sold can be deducted as selling or administrative expenses. 1040x instructions for dummies Generally, the only kinds of labor costs properly chargeable to your cost of goods sold are the direct or indirect labor costs and certain other costs treated as overhead expenses properly charged to the manufacturing process, as discussed later under Line 39 Other Costs. 1040x instructions for dummies Line 38 Materials and Supplies Materials and supplies, such as hardware and chemicals, used in manufacturing goods are charged to cost of goods sold. 1040x instructions for dummies Those that are not used in the manufacturing process are treated as deferred charges. 1040x instructions for dummies You deduct them as a business expense when you use them. 1040x instructions for dummies Business expenses are discussed in chapter 8. 1040x instructions for dummies Line 39 Other Costs Examples of other costs incurred in a manufacturing or mining process that you charge to your cost of goods sold are as follows. 1040x instructions for dummies Containers. 1040x instructions for dummies   Containers and packages that are an integral part of the product manufactured are a part of your cost of goods sold. 1040x instructions for dummies If they are not an integral part of the manufactured product, their costs are shipping or selling expenses. 1040x instructions for dummies Freight-in. 1040x instructions for dummies   Freight-in, express-in, and cartage-in on raw materials, supplies you use in production, and merchandise you purchase for sale are all part of cost of goods sold. 1040x instructions for dummies Overhead expenses. 1040x instructions for dummies   Overhead expenses include expenses such as rent, heat, light, power, insurance, depreciation, taxes, maintenance, labor, and supervision. 1040x instructions for dummies The overhead expenses you have as direct and necessary expenses of the manufacturing operation are included in your cost of goods sold. 1040x instructions for dummies Line 40 Add Lines 35 through 39 The total of lines 35 through 39 equals the cost of the goods available for sale during the year. 1040x instructions for dummies Line 41 Inventory at End of Year Subtract the value of your closing inventory (including, as appropriate, the allocable parts of the cost of raw materials and supplies, direct labor, and overhead expenses) from line 40. 1040x instructions for dummies Inventory at the end of the year is also known as closing or ending inventory. 1040x instructions for dummies Your ending inventory will usually become the beginning inventory of your next tax year. 1040x instructions for dummies Line 42 Cost of Goods Sold When you subtract your closing inventory (inventory at the end of the year) from the cost of goods available for sale, the remainder is your cost of goods sold during the tax year. 1040x instructions for dummies Prev  Up  Next   Home   More Online Publications
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The 1040x Instructions For Dummies

1040x instructions for dummies 2. 1040x instructions for dummies   Fuel Tax Credits and Refunds Table of Contents Gasoline and Aviation Gasoline Undyed Diesel Fuel and Undyed Kerosene (Other Than Kerosene Used in Aviation)Sales by Registered Ultimate Vendors Diesel-Water Fuel Emulsion Kerosene for Use in AviationSales by Registered Ultimate Vendors Other Fuels (Including Alternative Fuels) Refunds of Second TaxOptional reporting. 1040x instructions for dummies Providing information. 1040x instructions for dummies Definitions of Nontaxable UsesCustom application of fertilizer and pesticide. 1040x instructions for dummies Fuel used between airfield and farm. 1040x instructions for dummies Fuel not used for farming. 1040x instructions for dummies Vehicles not considered highway vehicles. 1040x instructions for dummies Biodiesel or Renewable Diesel Mixture Credit, Alternative Fuel Credit, and Alternative Fuel Mixture CreditHow to Claim the Credit Filing Claims Claiming A Refund Claiming a Credit on Form 4136 Including the Credit or Refund in Income Federal excise taxes are imposed on certain fuels as discussed in chapter 1. 1040x instructions for dummies This chapter lists the nontaxable uses of each fuel and defines the nontaxable uses. 1040x instructions for dummies Information on the refund of second tax is included. 1040x instructions for dummies This chapter also explains credits and refunds for the biodiesel or renewable diesel mixture credits, and the alternative fuel mixture and alternative fuel credits. 1040x instructions for dummies Information on how to make a claim for credit or refund is included in this chapter and in the instructions for: Form 720, Form 4136, and Form 8849. 1040x instructions for dummies Exported taxable fuel. 1040x instructions for dummies   The claim rates for exported taxable fuel are listed on Schedule C (Form 720), Schedule 1 (Form 8849), and Form 4136. 1040x instructions for dummies Taxpayers making a claim for exported taxable fuel must include with their records proof of exportation. 1040x instructions for dummies Proof of exportation includes: A copy of the export bill of lading issued by the delivering carrier, A certificate by the agent or representative of the export carrier showing actual exportation of the fuel, A certificate of lading signed by a customs officer of the foreign country to which the fuel is exported, or A statement of the foreign consignee showing receipt of the fuel. 1040x instructions for dummies Gasoline and Aviation Gasoline Ultimate Purchasers. 1040x instructions for dummies   The following are the uses of gasoline (defined earlier) for which a credit or refund may be allowable to an ultimate purchaser. 1040x instructions for dummies On a farm for farming purposes (credit only). 1040x instructions for dummies Off-highway business use. 1040x instructions for dummies Export. 1040x instructions for dummies In a boat engaged in commercial fishing. 1040x instructions for dummies In certain intercity and local buses. 1040x instructions for dummies In a school bus. 1040x instructions for dummies Exclusive use by a qualified blood collector organization. 1040x instructions for dummies In a highway vehicle owned by the United States that is not used on a highway. 1040x instructions for dummies Exclusive use by a nonprofit educational organization (see Sales by registered ultimate vendors and Credit Card Purchases, later). 1040x instructions for dummies Exclusive use by a state, political subdivision of a state, or the District of Columbia (see Sales by registered ultimate vendors and Credit Card Purchases, later). 1040x instructions for dummies In an aircraft or vehicle owned by an aircraft museum. 1040x instructions for dummies   The following are the uses of aviation gasoline for which a credit or refund may be allowable to an ultimate purchaser. 1040x instructions for dummies On a farm for farming purposes (credit only). 1040x instructions for dummies Export. 1040x instructions for dummies In foreign trade. 1040x instructions for dummies Certain helicopter and fixed-wing air ambulance uses. 1040x instructions for dummies In commercial aviation (other than foreign trade). 1040x instructions for dummies Exclusive use by a qualified blood collector organization. 1040x instructions for dummies Exclusive use by a nonprofit education organization (see Sales by registered ultimate vendors and Credit card purchases, later). 1040x instructions for dummies Exclusive use by a state, political subdivision of a state, or the District of Columbia (see Sales by registered ultimate vendors and Credit and purchases, later). 1040x instructions for dummies In an aircraft owned by an aircraft museum. 1040x instructions for dummies In military aircraft. 1040x instructions for dummies Claims by persons who paid the tax to the government. 1040x instructions for dummies   Except for sales to nonprofit educational organizations and states and local governments, a credit or refund is allowable to the person that paid the tax to the government if the gasoline was sold to the ultimate purchaser (including an exporter) by either that person or by a retailer and the fuel was exported; used or sold for use as supplies for vessels or aircraft, including military aircraft, commercial fishing, and foreign trade; sold to a qualified blood collector organization; or used or sold for use in the production of Other Fuels. 1040x instructions for dummies See Filing Claims, later. 1040x instructions for dummies Sales by registered ultimate vendors. 1040x instructions for dummies   This is an ultimate vendor that sells gasoline or aviation gasoline to any of the following and that is purchased without the use of a credit card. 1040x instructions for dummies A state or local government for its exclusive use (including essential government use by an Indian tribal government). 1040x instructions for dummies A nonprofit educational organization for its exclusive use. 1040x instructions for dummies   The registered ultimate vendor may make the claim if the ultimate purchaser did not use a credit card and waives its right to the credit or refund by providing the registered ultimate vendor with a certificate. 1040x instructions for dummies A sample certificate is included as Model Certificate M in the Appendix. 1040x instructions for dummies The registered ultimate vendor must have the certificate at the time the credit or refund is claimed. 1040x instructions for dummies   The ultimate vendor must be registered by the IRS. 1040x instructions for dummies See Registration Requirements, earlier. 1040x instructions for dummies Credit card purchases. 1040x instructions for dummies   If gasoline and aviation gasoline are purchased with a credit card issued to a state or local government for its exclusive use (including essential government use by an Indian tribal government), or a nonprofit educational organization for its exclusive use, the person who extended credit to the ultimate purchaser (the credit card issuer) is treated as the person that paid the tax and makes the claim if the credit card issuer: Is registered by the IRS, Has established that the amount of tax has not been collected from the person who purchased the gasoline or has obtained written consent from the ultimate purchaser to the allowance of the credit or refund, and Has repaid or agreed to repay the amount of the tax to the ultimate vendor, has obtained the written consent of the ultimate vendor to the allowance of the credit or refund, or has made arrangements that provide the ultimate vendor with reimbursement of the tax. 1040x instructions for dummies   If the requirements above are not met by the credit card issuer, the credit card issuer must collect the tax from the ultimate purchaser and only the ultimate purchaser may make the claim. 1040x instructions for dummies How to make the claim. 1040x instructions for dummies   If the claim is made by the credit card issuer, see Schedule C  (Form 720) or Schedule 8 (Form 8849). 1040x instructions for dummies Undyed Diesel Fuel and Undyed Kerosene (Other Than Kerosene Used in Aviation) For conditions to an allowance of a credit or refund on exported dyed diesel fuel and dyed kerosene, see Exported taxable fuel, earlier. 1040x instructions for dummies Ultimate purchasers. 1040x instructions for dummies   The following are nontaxable uses of diesel fuel and kerosene (defined earlier) for which a credit or refund may be allowable to an ultimate purchaser. 1040x instructions for dummies On a farm for farming purposes. 1040x instructions for dummies Off-highway business use. 1040x instructions for dummies Export. 1040x instructions for dummies In a qualified local bus. 1040x instructions for dummies In a school bus. 1040x instructions for dummies Other than as a fuel in a propulsion engine of a diesel-powered highway vehicle (such as home heating oil). 1040x instructions for dummies Exclusive use by a qualified blood collector organization. 1040x instructions for dummies In a highway vehicle owned by the United States that is not used on a highway. 1040x instructions for dummies Exclusive use by a nonprofit educational organization (see Sales by Registered Ultimate Vendors and Credit Card Purchases, later). 1040x instructions for dummies Exclusive use by a state, political subdivision of a state, or the District of Columbia (see Sales by Registered Ultimate Vendors and Credit Card Purchases, later). 1040x instructions for dummies In a vehicle owned by an aircraft museum. 1040x instructions for dummies As a fuel in a propulsion engine of a diesel-powered train. 1040x instructions for dummies Sales by Registered Ultimate Vendors The following are the sales for which a credit or refund may be allowable to the registered ultimate vendor only. 1040x instructions for dummies Undyed diesel fuel or undyed kerosene sold for the exclusive use by a state or local government (if credit card rules (defined later) do not apply), Undyed kerosene sold from a blocked pump (defined below), or Undyed diesel fuel or undyed kerosene used in certain intercity and local buses, only if the ultimate purchaser waives its right to the credit or refund by providing the registered ultimate vendor with a waiver. 1040x instructions for dummies Registered ultimate vendor (state use). 1040x instructions for dummies   This is a person that sells undyed diesel fuel or undyed kerosene to a state or local government for its exclusive use (including essential government use by an Indian tribal government). 1040x instructions for dummies The diesel fuel or kerosene must be purchased by the state without the use of a credit card, issued to the state by the credit card issuer, in order for the ultimate vendor to make the claim. 1040x instructions for dummies The ultimate vendor must be registered by the IRS. 1040x instructions for dummies See Registration Requirements, earlier. 1040x instructions for dummies Registered ultimate vendor (blocked pump). 1040x instructions for dummies   This is an ultimate vendor that sells undyed kerosene from a blocked pump. 1040x instructions for dummies   A credit or refund may be allowable to a registered ultimate vendor (blocked pump) if the vendor sold to a buyer undyed kerosene from a blocked pump for use other than as a fuel in a diesel-powered highway vehicle and the vendor had no reason to believe the kerosene would not be used in that manner. 1040x instructions for dummies Blocked pump. 1040x instructions for dummies   A blocked pump is a fuel pump that meets all the following requirements. 1040x instructions for dummies It is used to make retail sales of undyed kerosene for use by the buyer in any nontaxable use. 1040x instructions for dummies It is at a fixed location. 1040x instructions for dummies It is identified with a legible and conspicuous notice stating, “UNDYED UNTAXED KEROSENE, NONTAXABLE USE ONLY. 1040x instructions for dummies ” It meets either of the following conditions. 1040x instructions for dummies It cannot reasonably be used to dispense fuel directly into the fuel supply tank of a diesel-powered highway vehicle or train. 1040x instructions for dummies It is locked by the vendor after each sale and unlocked by the vendor only in response to a buyer's request for undyed kerosene for use other than as a fuel in a diesel-powered highway vehicle or train. 1040x instructions for dummies Registered ultimate vendor (certain intercity and local buses). 1040x instructions for dummies   This is an ultimate vendor that sells undyed diesel fuel or undyed kerosene to the ultimate purchaser for use in certain intercity and local buses. 1040x instructions for dummies   The registered ultimate vendor may make the claim if the ultimate purchaser waives its right to the credit or refund by providing the registered ultimate vendor with a waiver. 1040x instructions for dummies A sample waiver is included as Model Waiver N in the Appendix. 1040x instructions for dummies The registered ultimate vendor must have the waiver at the time the credit or payment is claimed. 1040x instructions for dummies Credit Card Purchases. 1040x instructions for dummies   If undyed diesel fuel or kerosene is purchased with a credit card issued to a state, the person who extended credit to the state (the credit card issuer) is treated as the person that paid the tax and makes the claim if the credit card issuer: Is registered by the IRS, Has established that the amount of tax has not been collected from the person who purchased the diesel fuel or kerosene, or has obtained written consent from the ultimate purchaser to the allowance of the credit or refund, and Has repaid or agreed to repay the amount of the tax to the ultimate vendor, has obtained the written consent of the ultimate vendor to the allowance of the credit or refund, or has made arrangements that provide the ultimate vendor with reimbursement of the tax. 1040x instructions for dummies   If the requirements above are not met by the credit card issuer, the credit card issuer must collect the tax from the ultimate purchaser and only the ultimate purchaser may make the claim. 1040x instructions for dummies Diesel-Water Fuel Emulsion A claim for credit or refund may be made for the nontaxable use of a diesel-water fuel emulsion and for undyed diesel fuel used to produce a diesel-water fuel emulsion. 1040x instructions for dummies The claim rate for nontaxable use of a diesel-water fuel emulsion taxed at $. 1040x instructions for dummies 198 per gallon is $. 1040x instructions for dummies 197 (if exported, the claim rate is $. 1040x instructions for dummies 198). 1040x instructions for dummies The following are the nontaxable uses for a diesel-water fuel emulsion for which a credit or refund may be allowable to an ultimate purchaser. 1040x instructions for dummies On a farm for farming purposes. 1040x instructions for dummies Off-highway business use. 1040x instructions for dummies Export. 1040x instructions for dummies In a qualified local bus. 1040x instructions for dummies In a school bus. 1040x instructions for dummies Other than as fuel in the propulsion engine of a train or diesel-powered highway vehicle (but not off-highway use). 1040x instructions for dummies Exclusive use by a qualified blood collector organization. 1040x instructions for dummies In a highway vehicle owned by the United States that is not used on a highway. 1040x instructions for dummies Exclusive use by a nonprofit educational organization. 1040x instructions for dummies Exclusive use by a state, political subdivision of a state, or the District of Columbia. 1040x instructions for dummies In an aircraft or vehicle owned by an aircraft museum. 1040x instructions for dummies Blender claims. 1040x instructions for dummies   The claim rate for undyed diesel fuel taxed at $. 1040x instructions for dummies 244 and used to produce a diesel-water fuel emulsion is $. 1040x instructions for dummies 046 per gallon of diesel fuel so used. 1040x instructions for dummies The blender must be registered by the IRS in order to make the claim. 1040x instructions for dummies The blender must attach a statement to the claim certifying that: The diesel-water fuel emulsion contains at least 14% water, The emulsion additive is registered by a United States manufacturer with the EPA under section 211 of the Clean Air Act as in effect on March 31, 2003, Undyed diesel fuel taxed at $. 1040x instructions for dummies 244 was used to produce the diesel-water fuel emulsion, and The diesel-water fuel emulsion was used or sold for use in the blender's trade or business. 1040x instructions for dummies Kerosene for Use in Aviation Ultimate purchasers. 1040x instructions for dummies   Ultimate purchasers of kerosene used in certain aviation uses may make a claim if the rate of tax on their use is less than the rate of tax that was charged on the kerosene. 1040x instructions for dummies   The ultimate purchaser of the kerosene used in commercial aviation (other than foreign trade) and noncommercial aviation (other than nonexempt, noncommercial aviation and exclusive use by a state, political subdivision of a state, or the District of Columbia) is eligible to make a claim if the ultimate purchaser certifies that the right to make the claim has not been waived. 1040x instructions for dummies Generally, the ultimate purchaser is the aircraft operator. 1040x instructions for dummies   The following are the nontaxable uses of kerosene used in noncommercial aviation for which a credit or refund may be allowable to the ultimate purchaser. 1040x instructions for dummies On a farm for farming purposes. 1040x instructions for dummies Certain helicopter and fixed-wing aircraft uses. 1040x instructions for dummies Exclusive use by a qualified blood collector organization. 1040x instructions for dummies Exclusive use by a nonprofit educational organization. 1040x instructions for dummies In an aircraft owned by an aircraft museum. 1040x instructions for dummies In military aircraft. 1040x instructions for dummies Kerosene for use partly in commercial aviation and partly in nonexempt, noncommercial aviation. 1040x instructions for dummies   If the fuel is used partly for use in commercial aviation and partly for use in nonexempt, noncommercial aviation, the operator may identify, either at the time of purchase or after the kerosene has been used, the amount that will be (or has been) used in commercial aviation. 1040x instructions for dummies At the same time, the operator would either make the claim or waive the right to make the claim for credit or refund of the kerosene for use in commercial and nonexempt, noncommercial aviation. 1040x instructions for dummies   If the operator does not identify the amount of kerosene that will be (or has been) used in commercial aviation, the operator may provide a certificate to the ultimate vendor similar to Model Certificate Q in the Appendix. 1040x instructions for dummies For kerosene purchased with the certificate, used in commercial aviation, and taxed at $. 1040x instructions for dummies 244 per gallon, use of the certificate will be treated as a waiver of the right to claim a credit or refund for the $. 1040x instructions for dummies 025 per gallon part of the tax. 1040x instructions for dummies The ultimate vendor may make this claim. 1040x instructions for dummies The operator may make a claim for the $. 1040x instructions for dummies 175 tax per gallon of the kerosene, but cannot waive the right to make the claim for the $. 1040x instructions for dummies 175 tax per gallon. 1040x instructions for dummies Sales by Registered Ultimate Vendors Kerosene for use in commercial aviation or noncommercial aviation. 1040x instructions for dummies   The registered ultimate vendor of kerosene for use in commercial aviation (other than foreign trade) or noncommercial aviation (other than nonexempt, noncommercial aviation and exclusive use by a state, political subdivision of a state, or the District of Columbia) may make this claim if the ultimate purchaser waives its right to the credit or payment by providing the registered ultimate vendor with a waiver. 1040x instructions for dummies A sample waiver is included as Model Waiver L in the Appendix. 1040x instructions for dummies The registered ultimate vendor must have the waiver at the time the credit or payment is claimed. 1040x instructions for dummies   Noncommercial aviation means any use of an aircraft not described as commercial aviation. 1040x instructions for dummies For the definition of commercial aviation, see Commercial aviation on page 11. 1040x instructions for dummies Kerosene for use in nonexempt, noncommercial aviation. 1040x instructions for dummies   Only the registered ultimate vendor may claim a credit or payment for sales of kerosene for use in nonexempt, noncommercial aviation. 1040x instructions for dummies The ultimate vendor must be registered by the IRS (activity letter UA) and have the required certificate from the ultimate purchaser. 1040x instructions for dummies A sample certificate is included as Model Certificate Q in the Appendix. 1040x instructions for dummies The registered ultimate vendor must have the certificate at the time the credit or payment is claimed. 1040x instructions for dummies Kerosene for use in aviation by a state or local government. 1040x instructions for dummies   Only the registered ultimate vendor may claim a credit or payment for sales of kerosene for use in aviation to a state or local government for its exclusive use (including essential government use by an Indian tribal government). 1040x instructions for dummies The kerosene for use in aviation must be purchased by the state without the use of a credit card in order for the ultimate vendor to make the claim. 1040x instructions for dummies The ultimate vendor must be registered by the IRS (activity letter UV) and have the required certificate from the ultimate purchaser. 1040x instructions for dummies A sample certificate is included as Model Certificate P in the Appendix. 1040x instructions for dummies The registered ultimate vendor must have the certificate at the time the credit or payment is claimed. 1040x instructions for dummies Credit card purchases. 1040x instructions for dummies   If taxed kerosene for use in aviation is purchased with a credit card issued to a state, the person who extended credit to the state (the credit card issuer) is treated as the person that paid the tax and makes the claim if the credit card issuer: Is registered by the IRS, Has established that the amount of tax has not been collected from the person who purchased the kerosene, or has obtained written consent from the ultimate purchaser to the allowance of the credit or refund, and Has repaid or agreed to repay the amount of the tax to the ultimate vendor, has obtained the written consent of the ultimate vendor to the allowance of the credit or refund, or has made arrangements that provide the ultimate vendor with reimbursement of the tax. 1040x instructions for dummies   If the requirements above are not met by the credit card issuer, the credit card issuer must collect the tax from the ultimate purchaser and only the ultimate purchaser may make the claim. 1040x instructions for dummies Other Fuels (Including Alternative Fuels) Credit or refund for nontaxable use of taxed Other Fuels may be allowable to an ultimate purchaser. 1040x instructions for dummies While tax is generally imposed on delivery, Other Fuels are taxed prior to delivery in the case of certain bulk sales described in chapter 1. 1040x instructions for dummies The following are the nontaxable uses of Other Fuels for which a credit or refund may be allowable to the ultimate purchaser. 1040x instructions for dummies On a farm for farming purposes. 1040x instructions for dummies Off-highway business use. 1040x instructions for dummies In a boat engaged in commercial fishing. 1040x instructions for dummies In certain intercity and local buses. 1040x instructions for dummies In a school bus. 1040x instructions for dummies In a qualified local bus. 1040x instructions for dummies Exclusive use by a qualified blood collector organization. 1040x instructions for dummies Exclusive use by a nonprofit educational organization. 1040x instructions for dummies Exclusive use by a state, political subdivision of a state, or the District of Columbia. 1040x instructions for dummies In an aircraft or vehicle owned by an aircraft museum. 1040x instructions for dummies Use in any boat operated by the United States for its exclusive use or any vessel of war of any foreign nation. 1040x instructions for dummies See Biodiesel or Renewable Diesel Mixture Credit, Alternative Fuel Credit, and Alternative Fuel Mixture Credit, later. 1040x instructions for dummies Refunds of Second Tax The tax on dyed diesel fuel for inland waterways fuel use applies at the rate listed on Form 720. 1040x instructions for dummies This is in addition to all other taxes imposed on the sale or use of the fuel. 1040x instructions for dummies The section 4081(e) refund (discussed below) cannot be claimed. 1040x instructions for dummies If the tax is paid and reported to the government on more than one taxable event for a taxable fuel under section 4081, the person paying the “second tax” may claim a refund (without interest) of that tax if certain conditions and reporting requirements are met. 1040x instructions for dummies No credit against any tax is allowed for this tax. 1040x instructions for dummies For information about taxable events, see the discussions under Gasoline, Diesel Fuel and Kerosene and Kerosene for Use in Aviation in chapter 1. 1040x instructions for dummies Conditions to allowance of refund. 1040x instructions for dummies   A claim for refund of the tax is allowed only if all the following conditions are met. 1040x instructions for dummies A tax on the fuel was paid to the government and not credited or refunded (the “first tax”). 1040x instructions for dummies After the first tax was imposed, another tax was imposed on the same fuel and was paid to the government (the “second tax”). 1040x instructions for dummies The person that paid the second tax filed a timely claim for refund containing the information required (see Refund claim, later). 1040x instructions for dummies The person that paid the first tax has met the reporting requirements, discussed next. 1040x instructions for dummies Reporting requirements. 1040x instructions for dummies   Generally, the person that paid the first tax must file a “First Taxpayer's Report” with its Form 720 for the quarter to which the report relates. 1040x instructions for dummies A model first taxpayer's report is shown in the Appendix as Model Certificate B. 1040x instructions for dummies The report must contain all information needed to complete the model. 1040x instructions for dummies   By the due date for filing the Form 720, you must also send a separate copy of the report to the following address. 1040x instructions for dummies Department of the Treasury Internal Revenue Service  Cincinnati, OH 45999-0555 Write “EXCISE – FIRST TAXPAYER'S REPORT” across the top of that copy. 1040x instructions for dummies Optional reporting. 1040x instructions for dummies   A first taxpayer's report is not required for the tax imposed on: Removal at a terminal rack, Nonbulk entries into the United States, and Removals or sales by blenders. 1040x instructions for dummies However, if the person liable for the tax expects that another tax will be imposed on that fuel, that person should (but is not required to) file a first taxpayer's report. 1040x instructions for dummies Providing information. 1040x instructions for dummies   The first taxpayer must give a copy of the report to the buyer of the fuel within the bulk transfer/terminal system or to the owner of the fuel immediately before the first tax was imposed, if the first taxpayer is not the owner at that time. 1040x instructions for dummies If an optional report is filed, a copy should (but is not required to) be given to the buyer or owner. 1040x instructions for dummies   A person that receives a copy of the first taxpayer's report and later sells the fuel within the bulk transfer/terminal system must give the copy and a “Statement of Subsequent Seller” to the buyer. 1040x instructions for dummies If the later sale is outside the bulk transfer/terminal system and that person expects that another tax will be imposed, that person should (but is not required to) give the copy and the statement to the buyer. 1040x instructions for dummies A model statement of subsequent seller is shown in the Appendix as Model Certificate A. 1040x instructions for dummies The statement must contain all information necessary to complete the model. 1040x instructions for dummies   If the first taxpayer's report relates to fuel sold to more than one buyer, copies of that report must be made when the fuel is divided. 1040x instructions for dummies Each buyer must be given a copy of the report. 1040x instructions for dummies Refund claim. 1040x instructions for dummies   You must have filed Form 720 and paid the second tax before you file for a refund of that tax. 1040x instructions for dummies You must make your claim for refund on Form 8849. 1040x instructions for dummies Complete Schedule 5 (Form 8849) and attach it to your Form 8849. 1040x instructions for dummies Do not include this claim with a claim under another tax provision. 1040x instructions for dummies You must not have included the second tax in the price of the fuel and must not have collected it from the purchaser. 1040x instructions for dummies You must submit the following information with your claim. 1040x instructions for dummies A copy of the first taxpayer's report (discussed earlier). 1040x instructions for dummies A copy of the statement of subsequent seller if the fuel was bought from someone other than the first taxpayer. 1040x instructions for dummies Definitions of Nontaxable Uses This section provides definitions of the terms used in Table 2-1 for nontaxable uses. 1040x instructions for dummies If applicable, the type of use number from Table 2-1 is indicated in each heading. 1040x instructions for dummies Type of use table. 1040x instructions for dummies   The first column of the table is the number you enter on Form 4136, Form 8849, or Schedule C (Form 720) for that type of use. 1040x instructions for dummies For type of use 2, the mobile machinery parenthetical applies only to Form 8849 and Form 720. 1040x instructions for dummies Table 2-1. 1040x instructions for dummies Type of Use Table No. 1040x instructions for dummies Type of Use 1 On a farm for farming purposes 2 Off-highway business use (for business use other than in a highway vehicle registered or required to be registered for highway use) (other than use in mobile machinery) 3 Export 4 In a boat engaged in commercial fishing 5 In certain intercity and local buses 6 In a qualified local bus 7 In a bus transporting students and employees of schools (school buses) 8 For diesel fuel and kerosene (other than kerosene used in aviation) used other than as a fuel in the propulsion engine of a train or diesel-powered highway vehicle (but not off-highway business use) 9 In foreign trade 10 Certain helicopter and fixed-wing aircraft uses 11 Exclusive use by a qualified blood collector organization 12 In a highway vehicle owned by the United States that is not used on a highway 13 Exclusive use by a nonprofit educational organization 14 Exclusive use by a state, political subdivision of a state, or the District of Columbia 15 In an aircraft or vehicle owned by an aircraft museum 16 In military aircraft On a farm for farming purposes (No. 1040x instructions for dummies 1). 1040x instructions for dummies   On a farm for farming purposes means fuel used in carrying on a trade or business of farming, on a farm in the United States, and for farming purposes. 1040x instructions for dummies Farm. 1040x instructions for dummies   A farm includes livestock, dairy, fish, poultry, fruit, fur-bearing animals, and truck farms; orchards; plantations; ranches; nurseries; ranges; and feed yards for fattening cattle. 1040x instructions for dummies It also includes structures such as greenhouses used primarily for the raising of agricultural or horticultural commodities. 1040x instructions for dummies A fish farm is an area where fish are grown or raised — not merely caught or harvested. 1040x instructions for dummies Farming purposes. 1040x instructions for dummies   As an owner, tenant, or operator, you use fuel on a farm for farming purposes if you use it in any of the following ways. 1040x instructions for dummies To cultivate the soil or to raise or harvest any agricultural or horticultural commodity. 1040x instructions for dummies To raise, shear, feed, care for, train, or manage livestock, bees, poultry, fur-bearing animals, or wildlife. 1040x instructions for dummies To operate, manage, conserve, improve, or maintain your farm and its tools and equipment. 1040x instructions for dummies To handle, dry, pack, grade, or store any raw agricultural or horticultural commodity. 1040x instructions for dummies For this use to qualify, you must have produced more than half the commodity so treated during the tax year. 1040x instructions for dummies Commodity means a single raw product. 1040x instructions for dummies For example, apples and peaches are two separate commodities. 1040x instructions for dummies To plant, cultivate, care for, or cut trees or to prepare (other than sawing logs into lumber, chipping, or other milling) trees for market, but only if the planting, etc. 1040x instructions for dummies , is incidental to your farming operations. 1040x instructions for dummies Your tree operations will be incidental only if they are minor in nature when compared to the total farming operations. 1040x instructions for dummies   If any other person, such as a neighbor or custom operator, performs a service for you on your farm for any of the purposes listed in (1) or (2), you are considered to be the ultimate purchaser that used the fuel on a farm for farming purposes. 1040x instructions for dummies However, see Custom application of fertilizer and pesticide, next. 1040x instructions for dummies   If doubt exists whether the owner, the tenant, or the operator of the farm bought the fuel, determine who bore the cost of the fuel. 1040x instructions for dummies For example, if the owner of a farm and the tenant equally share the cost of gasoline that is used on a farm for farming purposes, each can claim a credit for the tax on one-half the fuel used. 1040x instructions for dummies Custom application of fertilizer and pesticide. 1040x instructions for dummies   Fuel used on a farm for farming purposes includes fuel used in the application of fertilizer, pesticides, or other substances, including aerial applications. 1040x instructions for dummies Generally, the applicator is treated as having used the fuel on a farm for farming purposes. 1040x instructions for dummies For aviation gasoline, the aerial applicator makes the claim as the ultimate purchaser. 1040x instructions for dummies For kerosene used in aviation, the ultimate purchaser may make the claim or waive their right to make the claim to the registered ultimate vendor. 1040x instructions for dummies Fuel used between airfield and farm. 1040x instructions for dummies   Fuel used by an aerial applicator for the direct flight between the airfield and one or more farms is treated as a farming purpose. 1040x instructions for dummies Fuel not used for farming. 1040x instructions for dummies   Fuel is not used on a farm for farming purposes if it is used in any of the following ways. 1040x instructions for dummies Off the farm, such as on the highway or in noncommercial aviation, other than fuel used between the airfield and farm described above, even if the fuel is used in transporting livestock, feed, crops, or equipment. 1040x instructions for dummies For personal use, such as mowing the lawn. 1040x instructions for dummies In processing, packaging, freezing, or canning operations. 1040x instructions for dummies In processing crude gum into gum spirits of turpentine or gum resin or in processing maple sap into maple syrup or maple sugar. 1040x instructions for dummies Off-highway business use (No. 1040x instructions for dummies 2). 1040x instructions for dummies   Off-highway business use means fuel used in a trade or business or in an income-producing activity other than as a fuel in a highway vehicle registered or required to be registered for use on public highways. 1040x instructions for dummies The terms “highway vehicle,” “public highway,” and “registered” are defined below. 1040x instructions for dummies Do not consider any use in a boat as an off-highway business use. 1040x instructions for dummies   Off-highway business use includes fuels used in any of the following ways. 1040x instructions for dummies In stationary machines such as generators, compressors, power saws, and similar equipment. 1040x instructions for dummies For cleaning purposes. 1040x instructions for dummies In forklift trucks, bulldozers, and earthmovers. 1040x instructions for dummies   Generally, this use does not include nonbusiness use of fuel, such as use by minibikes, snowmobiles, power lawn mowers, chain saws, and other yard equipment. 1040x instructions for dummies Example. 1040x instructions for dummies Caroline owns a landscaping business. 1040x instructions for dummies She uses power lawn mowers and chain saws in her business. 1040x instructions for dummies The gasoline used in the power lawn mowers and chain saws qualifies as fuel used in an off-highway business use. 1040x instructions for dummies The gasoline used in her personal lawn mower at home does not qualify. 1040x instructions for dummies Highway vehicle. 1040x instructions for dummies   A highway vehicle is any self-propelled vehicle designed to carry a load over public highways, whether or not it is also designed to perform other functions. 1040x instructions for dummies Examples of vehicles designed to carry a load over public highways are passenger automobiles, motorcycles, buses, and highway-type trucks and truck tractors. 1040x instructions for dummies A vehicle is a highway vehicle even though the vehicle's design allows it to perform a highway transportation function for only one of the following. 1040x instructions for dummies A particular type of load, such as passengers, furnishings, and personal effects (as in a house, office, or utility trailer). 1040x instructions for dummies A special kind of cargo, goods, supplies, or materials. 1040x instructions for dummies Some off-highway task unrelated to highway transportation, except as discussed next. 1040x instructions for dummies Vehicles not considered highway vehicles. 1040x instructions for dummies   Generally, the following kinds of vehicles are not considered highway vehicles for purposes of the credit or refund of fuel taxes. 1040x instructions for dummies Specially designed mobile machinery for nontransportation functions. 1040x instructions for dummies A self-propelled vehicle is not a highway vehicle if all the following apply. 1040x instructions for dummies The chassis has permanently mounted to it machinery or equipment used to perform certain operations (construction, manufacturing, drilling, mining, timbering, processing, farming, or similar operations) if the operation of the machinery or equipment is unrelated to transportation on or off the public highways. 1040x instructions for dummies The chassis has been specially designed to serve only as a mobile carriage and mount (and power source, if applicable) for the machinery or equipment, whether or not the machinery or equipment is in operation. 1040x instructions for dummies The chassis could not, because of its special design and without substantial structural modification, be used as part of a vehicle designed to carry any other load. 1040x instructions for dummies The vehicle must have traveled less than 7,500 miles on public highways during the taxable year. 1040x instructions for dummies Vehicles specially designed for off-highway transportation. 1040x instructions for dummies A vehicle is not treated as a highway vehicle if the vehicle is specially designed for the primary function of transporting a particular type of load other than over the public highway and because of this special design, the vehicle's capability to transport a load over a public highway is substantially limited or impaired. 1040x instructions for dummies To make this determination, you can take into account the vehicle's size, whether the vehicle is subject to licensing, safety, or other requirements, and whether the vehicle can transport a load at a sustained speed of at least 25 miles per hour. 1040x instructions for dummies It does not matter that the vehicle can carry heavier loads off highway than it is allowed to carry over the highway. 1040x instructions for dummies Nontransportation trailers and semitrailers. 1040x instructions for dummies A trailer or semi-trailer is not treated as a highway vehicle if it is specially designed to function only as an enclosed stationary shelter for carrying on a nontransportation function at an off-highway site. 1040x instructions for dummies For example, a trailer that is capable only of functioning as an office for an off-highway construction operation is not a highway vehicle. 1040x instructions for dummies Public highway. 1040x instructions for dummies   A public highway includes any road in the United States that is not a private roadway. 1040x instructions for dummies This includes federal, state, county, and city roads and streets. 1040x instructions for dummies Registered. 1040x instructions for dummies   A vehicle is considered registered when it is registered or required to be registered for highway use under the law of any state, the District of Columbia, or any foreign country in which it is operated or situated. 1040x instructions for dummies Any highway vehicle operated under a dealer's tag, license, or permit is considered registered. 1040x instructions for dummies A highway vehicle is not considered registered solely because a special permit allows the vehicle to be operated at particular times and under specified conditions. 1040x instructions for dummies Dual use of propulsion motor. 1040x instructions for dummies   Off-highway business use does not include any fuel used in the propulsion motor of a registered highway vehicle even though that motor also operates special equipment by means of a power take-off or power transfer. 1040x instructions for dummies It does not matter if the special equipment is mounted on the vehicle. 1040x instructions for dummies Example. 1040x instructions for dummies The motor of a registered concrete-mixer truck operates both the engine and the mixing unit by means of a power take-off. 1040x instructions for dummies The fuel used in the motor to run the mixer is not off-highway business use. 1040x instructions for dummies Use in separate motor. 1040x instructions for dummies   Off-highway business use includes fuel used in a separate motor to operate special equipment, such as a refrigeration unit, pump, generator, or mixing unit. 1040x instructions for dummies If you draw fuel from the same tank that supplies fuel to the propulsion motor, you must figure the quantity used in the separate motor operating the special equipment. 1040x instructions for dummies You may make a reasonable estimate based on your operating experience and supported by your records. 1040x instructions for dummies   You can use devices that measure the miles the vehicle has traveled (such as hubometers) to figure the gallons of fuel used to propel the vehicle. 1040x instructions for dummies Add to this amount the fuel consumed while idling or warming up the motor before propelling the vehicle. 1040x instructions for dummies The difference between your total fuel used and the fuel used to propel the vehicle is the fuel used in the separate motor. 1040x instructions for dummies Example. 1040x instructions for dummies Hazel owns a refrigerated truck. 1040x instructions for dummies It has a separate motor for the refrigeration unit. 1040x instructions for dummies The same tank supplies both motors. 1040x instructions for dummies Using the truck's hubometer, Hazel figures that 90% of the fuel was used to propel the truck. 1040x instructions for dummies Therefore, 10% of the fuel is used in an off-highway business use. 1040x instructions for dummies Fuel lost or destroyed. 1040x instructions for dummies   You cannot treat fuel lost or destroyed through spillage, fire, or other casualty as fuel used in an off-highway business use. 1040x instructions for dummies Export (No. 1040x instructions for dummies 3). 1040x instructions for dummies   Export means fuel transported from the United States with the intention that the fuel remain in a foreign country or possession of the United States. 1040x instructions for dummies Fuel is not exported if it is in the fuel supply tank of a vehicle or aircraft. 1040x instructions for dummies In a boat engaged in commercial fishing (No. 1040x instructions for dummies 4). 1040x instructions for dummies   In a boat engaged in commercial fishing means fuel used in taking, catching, processing, or transporting fish, shellfish, or other aquatic life for commercial purposes, such as selling or processing the catch, on a specific trip basis. 1040x instructions for dummies They include boats used in both fresh and salt water fishing. 1040x instructions for dummies They do not include boats used for both sport fishing and commercial fishing on the same trip. 1040x instructions for dummies In certain intercity and local buses (No. 1040x instructions for dummies 5). 1040x instructions for dummies   In certain intercity and local buses means fuel used in a bus engaged in furnishing (for compensation) passenger land transportation available to the general public. 1040x instructions for dummies The bus must be engaged in one of the following activities. 1040x instructions for dummies Scheduled transportation along regular routes. 1040x instructions for dummies Nonscheduled operations if the seating capacity of the bus is at least 20 adults, not including the driver. 1040x instructions for dummies Vans and similar vehicles used for van-pooling or taxi service do not qualify. 1040x instructions for dummies Available to the general public. 1040x instructions for dummies   This means you offer service to more than a limited number of persons or organizations. 1040x instructions for dummies If a bus operator normally provides charter operations through travel agencies but has buses available for chartering by the general public, this service is available to the general public. 1040x instructions for dummies A bus does not qualify when its operator uses it to provide exclusive services to only one person, group, or organization. 1040x instructions for dummies Also, intercity bus transportation does not include transporting students and employees of schools or intercity transportation in a qualified local bus. 1040x instructions for dummies In a qualified local bus (No. 1040x instructions for dummies 6). 1040x instructions for dummies   In a qualified local bus means fuel used in a bus meeting all the following requirements. 1040x instructions for dummies It is engaged in furnishing (for compensation) intracity passenger land transportation available to the general public. 1040x instructions for dummies It operates along scheduled, regular routes. 1040x instructions for dummies It has a seating capacity of at least 20 adults (excluding the driver). 1040x instructions for dummies It is under contract with (or is receiving more than a nominal subsidy from) any state or local government to furnish the transportation. 1040x instructions for dummies Intracity passenger land transportation. 1040x instructions for dummies   This is the land transportation of passengers between points located within the same metropolitan area. 1040x instructions for dummies It includes transportation along routes that cross state, city, or county boundaries if the routes remain within the metropolitan area. 1040x instructions for dummies Under contract. 1040x instructions for dummies   A bus is under contract with a state or local government only if the contract imposes a bona fide obligation on the bus operator to furnish the transportation. 1040x instructions for dummies More than a nominal subsidy. 1040x instructions for dummies   A subsidy is more than nominal if it is reasonably expected to exceed an amount equal to 3 cents multiplied by the number of gallons of fuel used in buses on subsidized routes. 1040x instructions for dummies A company that operates its buses along subsidized and unsubsidized intracity routes may consider its buses qualified local buses only when the buses are used on the subsidized intracity routes. 1040x instructions for dummies In a school bus (No. 1040x instructions for dummies 7). 1040x instructions for dummies   In a school bus means fuel used in a bus engaged in the transportation of students or employees of schools. 1040x instructions for dummies A school is an educational organization with a regular faculty and curriculum and a regularly enrolled body of students who attend the place where the educational activities occur. 1040x instructions for dummies For diesel fuel and kerosene (other than kerosene used in aviation) used other than as a fuel (No. 1040x instructions for dummies 8). 1040x instructions for dummies   Diesel fuel and kerosene (other than kerosene used in aviation) used other than as a fuel in the propulsion engine of a diesel-powered highway vehicle or diesel-powered train (not including off-highway business use) means undyed diesel fuel and undyed kerosene used: For home heating, lighting, and cooking; In boats; In stationary machines, such as generators and compressors; For cleaning purposes; or In minibikes and snowmobiles. 1040x instructions for dummies In foreign trade (No. 1040x instructions for dummies 9). 1040x instructions for dummies   In foreign trade means fuel used in civil aircraft employed in foreign trade or trade between the United States and any of its possessions. 1040x instructions for dummies The term trade includes the transportation of persons or property for hire and the making of the necessary preparations for such transportation. 1040x instructions for dummies In the case of aircraft registered in a foreign country, the country must allow reciprocal benefits for aircraft registered in the United States. 1040x instructions for dummies Certain helicopter and fixed-wing aircraft uses (No. 1040x instructions for dummies 10). 1040x instructions for dummies   Includes: Certain helicopter uses. 1040x instructions for dummies   Certain helicopter uses means fuel used by a helicopter for any of the following purposes. 1040x instructions for dummies Transporting individuals, equipment, or supplies in the exploration for, or the development or removal of, hard minerals, oil, or gas. 1040x instructions for dummies Planting, cultivating, cutting, transporting, or caring for trees (including logging operations). 1040x instructions for dummies Providing emergency medical transportation. 1040x instructions for dummies   During a use described in items (1) and (2), the helicopter must not take off from, or land at, a facility eligible for assistance under the Airport and Airway Development Act of 1970, or otherwise use services provided pursuant to section 44509 or 44913(b) or subchapter I of chapter 471 of title 49, United States Code. 1040x instructions for dummies For item (1), treat each flight segment as a separate flight. 1040x instructions for dummies Fixed-wing aircraft uses. 1040x instructions for dummies   Fixed-wing aircraft uses means fuel used by a fixed-wing aircraft for any of the following purposes. 1040x instructions for dummies Planting, cultivating, cutting, transporting, or caring for trees (including logging operations). 1040x instructions for dummies Providing emergency medical transportation. 1040x instructions for dummies The aircraft must be equipped for and exclusively dedicated on that flight to acute care emergency medical services. 1040x instructions for dummies During a use described in item (1), the aircraft must not take off from, or land at, a facility eligible for assistance under the Airport and Airway Development Act of 1970, or otherwise use services provided pursuant to section 44509 or 44913(b) or subchapter I of chapter 471 of title 49, United States Code. 1040x instructions for dummies Exclusive use by a qualified blood collector organization (No. 1040x instructions for dummies 11). 1040x instructions for dummies   Exclusive use by a qualified blood collector organization means fuel used by the qualified blood collector organization for its exclusive use in the collection, storage, or transportation of blood. 1040x instructions for dummies Qualified blood collector organization. 1040x instructions for dummies   A qualified blood collector organization is one that is: Described in section 501(c)(3) and exempt from tax under section 501(a), Primarily engaged in the activity of collecting human blood, Registered by the IRS, and Registered by the Food and Drug Administration to collect blood. 1040x instructions for dummies In a highway vehicle owned by the United States that is not used on a highway (No. 1040x instructions for dummies 12). 1040x instructions for dummies   In a highway vehicle owned by the United States that is not used on a highway means fuel used in a vehicle that was not used on public highways during the period covered by the claim. 1040x instructions for dummies This use applies whether or not the vehicle is registered or required to be registered for highway use. 1040x instructions for dummies Exclusive use by a nonprofit educational organization (No. 1040x instructions for dummies 13). 1040x instructions for dummies   Exclusive use by a nonprofit educational organization means fuel used by an organization exempt from income tax under section 501(a) that meets both of the following requirements. 1040x instructions for dummies It has a regular faculty and curriculum. 1040x instructions for dummies It has a regularly enrolled body of students who attend the place where the instruction normally occurs. 1040x instructions for dummies   A nonprofit educational organization also includes a school operated by a church or other organization described in section 501(c)(3) if the school meets the above requirements. 1040x instructions for dummies Exclusive use by a state, political subdivision of a state, or the District of Columbia (No. 1040x instructions for dummies 14). 1040x instructions for dummies   Exclusive use by a state, political subdivision of a state, or the District of Columbia means fuel purchased by the state or local government for its exclusive use. 1040x instructions for dummies A state or local government is any state, any political subdivision thereof, or the District of Columbia. 1040x instructions for dummies An Indian tribal government is treated as a state only if the fuel is used in an activity that involves the exercise of an essential tribal government function. 1040x instructions for dummies Gasoline, diesel fuel, and kerosene used by the American Red Cross is considered to be the use of these fuels by a state. 1040x instructions for dummies In an aircraft or vehicle owned by an aircraft museum (No. 1040x instructions for dummies 15). 1040x instructions for dummies   In an aircraft or vehicle owned by an aircraft museum means fuel used in an aircraft or vehicle that is owned by an organization that meets all the following requirements. 1040x instructions for dummies It is exempt from income tax as an organization described in section 501(c)(3). 1040x instructions for dummies It is operated as a museum under a state (or District of Columbia) charter. 1040x instructions for dummies It is operated exclusively for acquiring, exhibiting, and caring for aircraft of the type used for combat or transport in  World War II. 1040x instructions for dummies   The aircraft or vehicle (such as a ground servicing vehicle for aircraft) must be used exclusively for the purposes described in item (3). 1040x instructions for dummies In military aircraft (No. 1040x instructions for dummies 16). 1040x instructions for dummies   In a military aircraft means fuel used in an aircraft owned by the United States or any foreign nation and constituting a part of its armed forces. 1040x instructions for dummies In commercial aviation (other than foreign trade). 1040x instructions for dummies   See Commercial aviation, earlier, for the definition. 1040x instructions for dummies Use in a train. 1040x instructions for dummies   Use in a train means fuel used in the propulsion engine of equipment or machinery that rides on rails. 1040x instructions for dummies This includes use in a locomotive, work train, switching engine, and track maintenance machine. 1040x instructions for dummies Biodiesel or Renewable Diesel Mixture Credit, Alternative Fuel Credit, and Alternative Fuel Mixture Credit For alternative fuel mixtures produced after December 31, 2011, see How to Claim the Credit below. 1040x instructions for dummies The section 6426 credit for biodiesel and alternative fuel consists of the biodiesel or renewable diesel mixture credit, alternative fuel credit, and alternative fuel mixture credit. 1040x instructions for dummies Biodiesel or renewable diesel mixture credit claimant. 1040x instructions for dummies   Claimant produced a biodiesel mixture by mixing biodiesel with diesel fuel. 1040x instructions for dummies Claimant produced a renewable diesel mixture by mixing renewable diesel with liquid fuel (other than renewable diesel). 1040x instructions for dummies   The person that produced and sold or used the mixture in their trade or business is the only person eligible to make this claim. 1040x instructions for dummies The credit is based on the gallons of biodiesel or renewable diesel in the mixture. 1040x instructions for dummies Renewable diesel does not include any fuel derived from coprocessing biomass (as defined in section 45K(c)(3)) with a feedstock that is not biomass. 1040x instructions for dummies Claim requirements. 1040x instructions for dummies   See the Instructions for Form 720 for the biodiesel or renewable diesel mixture claim requirements. 1040x instructions for dummies Alternative fuel credit claimant. 1040x instructions for dummies   For the alternative fuel credit, the registered alternative fueler who (1) sold an alternative fuel at retail delivered it into the fuel supply tank of a motor vehicle or motorboat, (2) sold an alternative fuel, delivered it in bulk taxable use in a motor vehicle or motorboat, and received required statement from the buyer, (3) used an alternative fuel (not sold at retail or in bulk as previously described) motor vehicle or motorboat, or (4) sold an alternative fuel used as a fuel in aviation is the only person eligible to make this claim. 1040x instructions for dummies Carbon capture requirement. 1040x instructions for dummies   A credit for Fischer-Tropsch process liquid fuel derived from coal (including peat) can be claimed only if the fuel is derived from coal produced at a gasification facility that separates and sequesters at least 75% of the facility's total carbon dioxide emissions. 1040x instructions for dummies Alternative fuel credit. 1040x instructions for dummies   The registered alternative fueler is the person eligible to make the claim. 1040x instructions for dummies An alternative fueler is the person liable for tax on alternative fuel under the rules for taxable events for Other Fuels (discussed in chapter 1) or would be liable but for an exemption for nontaxable uses. 1040x instructions for dummies An alternative fueler includes a person who sells for use or uses an alternative fuel in aviation. 1040x instructions for dummies Alternative fuel mixture credit claimant. 1040x instructions for dummies   For the alternative fuel mixture credit, the registered alternative fueler that produced and sold or used the mixture as a fuel in their trade or business is the only person eligible to make this claim. 1040x instructions for dummies The credit is based on the gallons of alternative fuel in the mixture. 1040x instructions for dummies An alternative fuel mixture is a mixture of alternative fuel and section 4081 taxable fuel (gasoline, diesel fuel, or kerosene). 1040x instructions for dummies Registration. 1040x instructions for dummies   You must be registered by the IRS to be eligible to claim the section 6426 fuel credit. 1040x instructions for dummies See Registration Requirements in chapter 1. 1040x instructions for dummies Credits for fuel provide incentive for United States production. 1040x instructions for dummies   The section 6426 fuel credit may not be claimed for alternative fuel that is produced outside the United States for use as a fuel outside the United States. 1040x instructions for dummies The United States includes any possession of the United States. 1040x instructions for dummies Credit for fuels derived from paper or pulp production. 1040x instructions for dummies   Credit for alternative fuels and alternative fuel mixtures for any fuel derived from the production of paper or pulp are not available for fuel sold or used on or after December 31, 2009. 1040x instructions for dummies How to Claim the Credit Any biodiesel or renewable diesel mixture credit must first be claimed on Schedule C to reduce your taxable fuel liability reported on Form 720. 1040x instructions for dummies Any excess credit may be claimed on Schedule C (Form 720), Schedule 3 (Form 8849), Form 4136, or Form 8864, Biodiesel and Renewable Diesel Fuels Credit. 1040x instructions for dummies See Notice 2005-4 and the Instructions for Form 720 for more information. 1040x instructions for dummies Also see Notice 2013-26 on page 984 of I. 1040x instructions for dummies R. 1040x instructions for dummies B. 1040x instructions for dummies 2013-18 at www. 1040x instructions for dummies irs. 1040x instructions for dummies gov/pub/irs-irbs/irb13-18. 1040x instructions for dummies pdf; and see chapter 2, later. 1040x instructions for dummies Coordination with income tax credit. 1040x instructions for dummies   Only one credit may be taken for any amount of biodiesel or renewable diesel. 1040x instructions for dummies If any amount is claimed (or will be claimed) for any amount of biodiesel or renewable diesel on Form 720, Form 8849, or Form 4136, then a claim cannot be made on Form 8864 for that amount of biodiesel or renewable diesel. 1040x instructions for dummies   Any alternative fuel credit must first be claimed on Schedule C (Form 720) to reduce your section 4041 taxable fuel liability for alternative fuel and CNG reported on Form 720. 1040x instructions for dummies Any excess credit may claimed on Schedule C (Form 720), Schedule 3 (Form 8849), or Form 4136. 1040x instructions for dummies   For alternative fuel mixtures produced after December 31, 2011, the alternative fuel mixture credit can be claimed on Schedule C (Form 720), not on Form 4136 or Schedule 3 (Form 8849), and only to the extent of your section 4081 taxable fuel liability for gasoline, diesel fuel and kerosene reported on Form 720. 1040x instructions for dummies   Calculate the limitation for alternative fuel mixtures separately and enter on Schedule C (Form 720), line 14, only the gallons of mixtures that do not exceed your section 4081 taxable fuel liability. 1040x instructions for dummies Filing Claims This section tells you how to make a claim for a credit or refund of excise taxes on fuels. 1040x instructions for dummies This section also covers recordkeeping requirements and when to include the credit or refund in your income. 1040x instructions for dummies Generally, you will provide all the information needed to claim a credit or refund when you properly complete Form 8849, Form 4136, Schedule C (Form 720), Form 6478, or Form 8864. 1040x instructions for dummies In some cases, you will have to attach additional information. 1040x instructions for dummies You need to keep records that support your claim for a credit or refund. 1040x instructions for dummies Keep at your principal place of business all records needed to enable the IRS to verify that you are the person entitled to claim a credit or refund and the amount you claimed. 1040x instructions for dummies Ultimate purchaser. 1040x instructions for dummies   Ultimate purchasers may make claims for the nontaxable use of fuels on Form 4136, Schedule 1 (Form 8849), and Schedule C (Form 720) if reporting excise tax liability on that return. 1040x instructions for dummies If you are an ultimate purchaser, you must keep the following records. 1040x instructions for dummies The number of gallons purchased and used during the period covered by your claim. 1040x instructions for dummies The dates of the purchases. 1040x instructions for dummies The names and addresses of suppliers and amounts purchased from each in the period covered by your claim. 1040x instructions for dummies The nontaxable use for which you used the fuel. 1040x instructions for dummies The number of gallons used for each nontaxable use. 1040x instructions for dummies It is important that your records show separately the number of gallons used for each nontaxable use that qualifies as a claim. 1040x instructions for dummies If the fuel is exported, you must have proof of exportation. 1040x instructions for dummies   For more information about keeping records, see Publication 583, Starting a Business and Keeping Records, or chapter 1 of Publication 17, Your Federal Income Tax for Individuals. 1040x instructions for dummies Exceptions. 1040x instructions for dummies    Generally, the ultimate purchaser may not claim a credit or refund for undyed diesel fuel, undyed kerosene, or kerosene for use in aviation sold for the exclusive use of a state or local government. 1040x instructions for dummies However, see Claims by credit card issuers, later, for an exception. 1040x instructions for dummies The ultimate purchaser may not claim a credit or refund as follows. 1040x instructions for dummies The ultimate purchaser of gasoline or aviation gasoline used by a state or local government for its exclusive use or by a nonprofit educational organization for its exclusive use may waive its right to make a claim by providing a certificate that is signed under penalties of perjury by a person authorized to bind the ultimate purchaser and is in the same format as the Model Certificate M. 1040x instructions for dummies A new certificate is required each year or when any information in the current certificate expires. 1040x instructions for dummies The ultimate purchaser of kerosene for use in commercial aviation or noncommercial aviation (other than nonexempt, noncommercial aviation and exclusive use by a state, political subdivision of a state, or the District of Columbia) may waive its right to make a claim by providing a waiver that is signed under penalties of perjury by a person authorized to bind the ultimate purchaser and is in the same format as the Model Waiver L. 1040x instructions for dummies A new waiver is required each year or when any information in the current waiver expires. 1040x instructions for dummies The ultimate purchaser of undyed diesel fuel or undyed kerosene used in certain intercity and local buses may waive its right to make a claim by providing a waiver that is signed under penalties of perjury by a person authorized to bind the ultimate purchaser and is in the same format as the Model Waiver N. 1040x instructions for dummies A new waiver is required each year or when any information in the current waiver expires. 1040x instructions for dummies The ultimate purchaser of kerosene for use in nonexempt, noncommercial aviation must provide a certificate that is signed under penalties of perjury by a person authorized to bind the ultimate purchaser and is in the same format as the Model Certificate Q. 1040x instructions for dummies A new certificate is required each year or when any information in the current certificate expires. 1040x instructions for dummies Registered ultimate vendor. 1040x instructions for dummies   Registered ultimate vendors may make claims for certain sales of fuels on Form 4136, Schedule 2 (Form 8849), and Schedule C (Form 720) if reporting excise tax liability on that return. 1040x instructions for dummies If you are a registered ultimate vendor, you must keep certain information pertaining to the sale of the fuel. 1040x instructions for dummies   To make a claim, you must have sold the fuel at a tax-excluded price, repaid the tax to the buyer, or obtained the buyer's written consent to the allowance of the claim. 1040x instructions for dummies You are required to have a valid certificate or waiver in your possession in order to make the claim. 1040x instructions for dummies   In addition, you must have a registration number that has not been revoked or suspended. 1040x instructions for dummies See Form 637. 1040x instructions for dummies State use. 1040x instructions for dummies   To make a claim as an ultimate vendor (state), you must have a UV registration number and the fuel cannot be purchased with a credit card as explained below. 1040x instructions for dummies If you sell undyed diesel fuel, undyed kerosene, or kerosene for use in aviation for use by a state or local government, you must keep the following information. 1040x instructions for dummies The name and taxpayer identification number of each person (government unit) that bought the fuel. 1040x instructions for dummies The number of gallons sold to each person. 1040x instructions for dummies An unexpired certificate from the buyer. 1040x instructions for dummies See Model Certificate P in the Appendix. 1040x instructions for dummies The certificate expires on the earlier of 1 year after the date of the certificate or the date a new certificate is given to the registered ultimate vendor. 1040x instructions for dummies Nonprofit educational organization and state use. 1040x instructions for dummies   To make a claim as an ultimate vendor (nonprofit educational organization or state), you must have a UV registration number and the fuel cannot be purchased with a credit card as explained later. 1040x instructions for dummies If you sell gasoline or aviation gasoline to a nonprofit educational organization for its exclusive use or to a state or local government for its exclusive use, you must keep the following information. 1040x instructions for dummies The name and taxpayer identification number of each person (nonprofit educational organization or government unit) that bought the fuel. 1040x instructions for dummies The number of gallons sold to each person. 1040x instructions for dummies An unexpired certificate from the buyer. 1040x instructions for dummies See Model Certificate M in the Appendix. 1040x instructions for dummies  The certificate expires on the earlier of 1 year after the date of the certificate or the date a new certificate is given to the registered ultimate vendor. 1040x instructions for dummies Blocked pump. 1040x instructions for dummies   To make a claim as an ultimate vendor (blocked pump), you must have a UP registration number. 1040x instructions for dummies If you sell undyed kerosene (other than kerosene for use in aviation) from a pump that qualifies as a blocked pump because it is locked by you after each sale and is unlocked by you at the request of the buyer, you must keep the following information for each sale of more than 5 gallons. 1040x instructions for dummies The date of each sale. 1040x instructions for dummies The name and address of the buyer. 1040x instructions for dummies The number of gallons sold to that buyer. 1040x instructions for dummies Certain intercity and local bus use. 1040x instructions for dummies   To make a claim as an ultimate vendor of undyed diesel fuel or undyed kerosene used in certain intercity and local buses, you must have a UB registration number. 1040x instructions for dummies You must keep the following information. 1040x instructions for dummies The date of each sale. 1040x instructions for dummies The name and address of the buyer. 1040x instructions for dummies The number of gallons sold to the buyer. 1040x instructions for dummies A copy of the waiver signed by the buyer at the time the credit or payment is claimed. 1040x instructions for dummies See Model Waiver N in the Appendix. 1040x instructions for dummies Kerosene for use in commercial aviation or noncommercial aviation. 1040x instructions for dummies   To make a claim as an ultimate vendor of kerosene for use in commercial aviation (other than foreign trade) or noncommercial aviation (other than nonexempt, noncommercial aviation and exclusive use by a state, political subdivision of a state, or the District of Columbia), you must have a UA registration number. 1040x instructions for dummies See Kerosene for use in aviation, earlier, for a list of nontaxable uses. 1040x instructions for dummies You must keep the following information. 1040x instructions for dummies The date of each sale. 1040x instructions for dummies The name and address of the buyer. 1040x instructions for dummies The number of gallons sold to the buyer. 1040x instructions for dummies A copy of the waiver signed by the buyer at the time the credit or payment is claimed. 1040x instructions for dummies See Model Waiver L in the Appendix. 1040x instructions for dummies Kerosene for use in nonexempt, noncommercial aviation. 1040x instructions for dummies   To make a claim as an ultimate vendor of kerosene for use in nonexempt, noncommercial aviation, you must have a UA registration number. 1040x instructions for dummies You must keep the following information. 1040x instructions for dummies The date of each sale. 1040x instructions for dummies The name and address of the buyer. 1040x instructions for dummies The number of gallons sold to the buyer. 1040x instructions for dummies A copy of the certificate signed by the buyer at the time the credit or payment is claimed. 1040x instructions for dummies See Model Certificate Q in the Appendix. 1040x instructions for dummies Claims by credit card issuers. 1040x instructions for dummies   For sales of gasoline, aviation gasoline, diesel fuel, kerosene, or kerosene for use in aviation that are purchased by an exempt user with the use of a credit card, the registered credit card issuer is the only person who can make the claim. 1040x instructions for dummies An exempt user for this purpose is: For gasoline or aviation gasoline, a state or local government (including essential government use by an Indian tribal government) or a nonprofit educational organization; or For diesel fuel, kerosene, or kerosene for use in aviation, a state or local government (including essential government use by an Indian tribal government). 1040x instructions for dummies   If gasoline is purchased without the use of a credit card, then the registered ultimate vendor of the gasoline may make the claim for refund or credit. 1040x instructions for dummies However, if the gasoline is purchased with a credit card issued to a state, but the credit card issuer is not registered by the IRS or does not meet the conditions described, the credit card issuer must collect the tax and the state may make the claim. 1040x instructions for dummies   If diesel fuel, kerosene, or kerosene for use in aviation is purchased without the use of a credit card, the registered ultimate vendor may make the claim for refund or credit. 1040x instructions for dummies A state is not allowed to make a claim for these fuels. 1040x instructions for dummies However, if the diesel fuel or kerosene is purchased with a credit card issued to a state, but the credit card issuer is not registered by the IRS or does not meet the conditions described, the credit card issuer must collect the tax and the state may make the claim. 1040x instructions for dummies   The claim from the credit card issuer must contain the following information as it applies to the fuel covered in the claim. 1040x instructions for dummies The total number of gallons. 1040x instructions for dummies Its registration number. 1040x instructions for dummies A statement that it has not collected the amount of tax from the ultimate purchaser or has obtained the written consent of the ultimate purchaser to make the claim. 1040x instructions for dummies A statement that it has repaid or agreed to repay the amount of tax to the ultimate vendor, has obtained the written consent of the ultimate vendor to make the claim, or has otherwise made arrangements which directly or indirectly provide the ultimate vendor with reimbursement of the tax. 1040x instructions for dummies Has in its possession an unexpired certificate similar to Model Certificate R in the Appendix and has no reason to believe any of the information in the certificate is false. 1040x instructions for dummies Taxpayer identification number. 1040x instructions for dummies   To file a claim, you must have a taxpayer identification number. 1040x instructions for dummies Your taxpayer identification number can be an: Employer identification number (EIN), Social security number (SSN), or Individual taxpayer identification number (ITIN), if you are an alien individual and do not have and are not eligible to get an SSN. 1040x instructions for dummies   If you normally file only a U. 1040x instructions for dummies S. 1040x instructions for dummies individual income tax return (such as Form 1040 or 1040NR), use your SSN or ITIN. 1040x instructions for dummies You get an SSN by filing Form SS-5, Application for a Social Security Card, with the Social Security Administration. 1040x instructions for dummies To get an ITIN, file Form W-7, Application for IRS Individual Taxpayer Identification Number, with the IRS. 1040x instructions for dummies   If you operate a business, use your EIN. 1040x instructions for dummies If you do not have an EIN, you may apply for one online. 1040x instructions for dummies Go to the IRS website at irs. 1040x instructions for dummies gov/businesses/small and click on the “Employer ID Numbers (EINs)” link. 1040x instructions for dummies You may also apply for an EIN by calling 1-800-829-4933, or you can fax or mail Form SS-4, Application for Employer Identification Number, to the IRS. 1040x instructions for dummies Claiming A Refund Generally, you may claim a refund of excise taxes on Form 8849. 1040x instructions for dummies Complete and attach to Form 8849 the appropriate Form 8849 schedules. 1040x instructions for dummies The instructions for Form 8849 and the separate instructions for each schedule explain the requirements for making a claim for refund. 1040x instructions for dummies If you file Form 720, you can use the Schedule C (Form 720) for your refund claims for the quarter. 1040x instructions for dummies See the Instructions for Form 720. 1040x instructions for dummies Do not claim a refund on Form 8849 for any amount for which you have filed or will file a claim on Schedule C (Form 720) or Form 4136. 1040x instructions for dummies The alternative fuel mixture credit must be claimed on Schedule C (Form 720) against your section 4081 taxable fuel liability for gasoline, diesel, and kerosene and any excess is not allowed. 1040x instructions for dummies The alternative fuel credit must first be claimed on Schedule C (Form 720) against your section 4041 taxable fuel liability for alternative fuel and CNG. 1040x instructions for dummies To the extent the alternative fuel credit exceeds this taxable fuel liability, a payment is allowed and may be claimed as a credit on Schedule C (Form 720), or as an income tax credit on Forms 4136, 6478, or 8864, as applicable. 1040x instructions for dummies Only one claim may be made for any particular amount of alternative fuel. 1040x instructions for dummies Claiming a Credit on Form 4136 For alternative fuel mixtures produced after December 31, 2011, the alternative fuel mixture credit cannot be claimed on Form 4136. 1040x instructions for dummies See Biodiesel or Renewable Diesel Mixture Credit, Alternative Fuel Credit and Alternative Fuel Mixture Credit in chapter 2, earlier. 1040x instructions for dummies A credit may be claimed for certain uses and sales of fuels on Form 4136 when you file your income tax return at the end of the year. 1040x instructions for dummies If you meet certain requirements (discussed earlier), you may be able to make a claim during the year. 1040x instructions for dummies Credit only. 1040x instructions for dummies   You can claim the following taxes only as a credit on Form 4136. 1040x instructions for dummies Tax on fuels used for nontaxable uses if the total for your tax year is less than $750. 1040x instructions for dummies Tax on fuel you did not include in any claim for refund previously filed for any quarter of your tax year. 1040x instructions for dummies Tax on fuel you used in mobile machinery (off-highway business use) that traveled less than 7,500 miles on public highways. 1040x instructions for dummies Do not claim a credit for any amount for which you have filed a refund claim on Form 8849 or credit on Schedule C (Form 720). 1040x instructions for dummies When to file. 1040x instructions for dummies   You can claim a fuel tax credit on your income tax return for the year you used the fuel (or sold the fuel in the case of a registered ultimate vendor claim). 1040x instructions for dummies You may be able to make a fuel tax claim on an amended income tax return for the year you used the fuel. 1040x instructions for dummies Generally, you must file an amended return by the later of 3 years from the date you filed your original return or within 2 years from the date you paid the income tax. 1040x instructions for dummies How to claim a credit. 1040x instructions for dummies   How you claim a credit depends on whether you are an individual, partnership, corporation, S corporation, or farmers' cooperative association. 1040x instructions for dummies Individuals. 1040x instructions for dummies   You claim the credit on the “Credits from” line of Form 1040. 1040x instructions for dummies Also check box b on that line. 1040x instructions for dummies If you would not otherwise have to file an income tax return, you must do so to get a fuel tax credit. 1040x instructions for dummies Partnerships. 1040x instructions for dummies   Partnerships (other than electing large partnerships) claim the credit by including a statement on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. 1040x instructions for dummies , showing each partner's share of the number of gallons of each fuel sold or used for a non