What is the Form 4136 used for?
Everyone pays tax when purchasing most types of fuels. However, the federal government allows people who use certain fuels in certain ways to claim a credit for the federal taxes they’ve already paid on those fuels, in essence waiving or partially waiving the federal tax in specified situations.
You can complete the “Credit For Federal Tax Paid On Fuels” and file it with your tax return to claim a credit for the amount you paid (or the amount that is waived) in federal taxes if your use of the fuel qualifies for a tax reduction or exemption.
There are dozens of specific situations where using a particular fuel for a particular use qualifies you, as the end user, to pay reduced federal taxes or where the fuel is entirely tax-free (on the federal level, that is – your state may still tax these fuel purchases). This form lists each of the specified fuels and use-cases that qualify for a reduction or elimination of federal taxes.
Common credits you can claim on Form 4136 include those for:
- Nontaxable uses of alternative fuels such as
- Liquified hydrogen
- Liquified petroleum
- “P Series” fuels
- Liquified petroleum gas (LPG)
- Compressed natural gas (CNG)
- Liquified natural gas (LNG)
- Liquid fuel and liquified gas from biomass
- Fischer Tropsch process liquid fuel from coal
- Biodiesel or renewable diesel mixture
- Blending diesel-water fuel emulsions
- Commercial aviation uses of gasoline and kerosine
- Exporting dyed fuels or gasoline blend stocks
- Business uses of gasoline in vehicles that are not registered for highway use (such as agricultural vehicles or landscaping equipment)
- Exported gasoline or undyed diesel fuel
- Undyed diesel fuel used for farming or on a farm
- Undyed diesel fuel for use in trains, certain bus transportation or other nontaxable uses
The amount of your credit depends on the fuel and its specific use, with different fuels and use-cases qualifying for different per-gallon credit rates. Enter the appropriate fuel/use separately on Form 4136 and calculate the amount of the credit for each one, then add these amounts together to determine your total credit.
In some cases, you may be able to claim the credit earlier by filing Form 8849, Claim for Refund of Excise Taxes or Form 720, Quarterly Federal Excise Tax Return.