Clean Fuel Tax Credits Get Extended
The Inflation Reduction Act had a nice benefit buried within the pages in regards to alternative fuel, an extension of credits through December 31, 2024! The credits had previously expired December 31, 2021. This extension includes the alternative fuel and the alternative fuel mixture credit. Alternative fuels include natural gas, propane, liquefied hydrogen, P-Series fuel, compressed or liquefied gas derived from biomass, and liquefied fuel derived from coal through the Fischer-Tropsch process. We see the alternative fuel credit most commonly on liquefied petroleum gas (LPG) for use in forklifts in yards or warehouses. The credit can be claimed periodically, quarterly or with an annual Federal income tax return on Form 4136. The amount of the credit is $0.50 per gallon but make sure you convert the gallons to the gasoline gallon equivalent (GGE) or diesel gallon equivalent (DGE).
In addition to alternative fuels, other “clean fuel” credits/incentives also received an extension.
- Biodiesel and renewable diesel credit through December 31, 2024
- Biodiesel mixture credit through December 31, 2024
- Second generation biofuel incentives through 2025
Take advantage of these opportunities when possible and if you’re wondering if something qualifies reach out to a trusted tax advisor.
Nathan is a CPA and has more than ten years of experience providing tax planning, consulting and compliance services to a number of privately held businesses and individuals in a variety of industries, with a special focus on the transportation and logistics industry. He actively communicates with clients and seeks ways to align their individual and business goals with available tax strategies to allow them to make well-informed decisions.
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