IRS publishes tax code for biodiesel tax credits

The US tax authority IRS has published a notice informing claimants about the federal income tax treatment of fuel credits under sections 6426(c) and (d) of the internal revenue code.

These sections regulate the federal payments made to biodiesel and alternative fuel producers in compensation for producing these fuels.

The section 6426(c) allows a blender of a biodiesel (including renewable diesel) mixture to claim a credit (biodiesel mixture credit) against its tax liability, relating to the tax imposed on taxable fuel.

Similarly, section 6426(d) allows a claimant that sells or uses alternative fuel as a fuel in a motor vehicle or motorboat, or in aviation, to claim a credit (alternative fuel credit) against the claimant's excise tax liability, relating to the tax imposed on diesel fuel and alternative fuel.

Specifically, the notification deals with how income tax deductions for biofuels producers work with these payments.

The IRS notifies producers of biodiesel and alternative fuel (sections 6426(c) and (d) respectively) that they must deduct the amount of fuel credits paid to them for fuel or fuel mixture sold or used during each calendar quarter of 2014 from the amounts they claim in income tax deduction.