Form 4136: Federal Fuel Tax Credit

Form 4136, Credit for Federal Tax Paid on Fuels, is for businesses that use certain fuels in ways the federal fuel tax does not cover. The IRS says you use it to claim a credit for certain nontaxable uses or sales of fuel during the tax year. It also covers the alternative fuel credit and a credit for a diesel-water fuel emulsion. IRS: About Form 4136

Check eligibility first

Part I asks whether you have a qualifying business or business activity with qualifying use of qualifying fuels. The form says: if No, do not file this form. IRS: Form 4136 (2025)

The form also says you must have owned or operated a business and conducted a qualifying business activity. You must have the name and address of the person who sold you the fuel, and the dates of purchase. Keep those records. IRS: Form 4136 (2025)

Part II: the credit lines

Part II lists the credits by type. The groups cover nontaxable use of gasoline, nontaxable use of aviation gasoline, and nontaxable use of undyed diesel fuel. The form also uses a credit reference number, or CRN. IRS: Form 4136 (2025)

Each line uses a type-of-use code. For example, code 2 is off-highway business use for gasoline, and code 1 is use on a farm for farming purposes. This post does not list the rates. Use the rates printed on the form for your year. Read the form itself for the full list of codes, since this post covers only the layout. If you are unsure whether a use qualifies, read the instructions for Form 4136 on IRS.gov before you claim the credit. IRS: Form 4136 (2025)

More than one business activity

If you have more than one qualifying business activity, complete a separate Schedule A (Form 4136) for each one. Then enter the totals on Form 4136. The form also asks you to describe the business activity that generates the most credit. IRS: Form 4136 (2025)

Where the credit goes

The credit reaches your Form 1040 through Schedule 3, line 12. That line is the federal fuel tax credit. See Schedule 3 (Form 1040) for the other credit lines. IRS: Form 4136 (2025)

Steps to follow

Answer the Part I question. If the answer is no, stop here.
Gather fuel records: the seller's name and address, purchase dates, gallons, and cost.
Assign each use to the matching type-of-use line.
Complete a Schedule A for each qualifying business activity, if you have more than one.
Carry the total to Schedule 3, line 12.

Records to keep

Keep fuel purchase records for each claim. Record the seller's name and address, the purchase dates, the gallons, and the actual fuel cost. Keep records that show how the fuel was used. The form's caution asks you to confirm these items before you claim the credit. IRS: Form 4136 (2025)

Common mix-ups

Each line is one type of use. Put a use only on the line that matches it.
Type-of-use code 2 on the form applies to equipment or a vehicle that was not a highway vehicle. The caution text says so.
For some uses, the form asks whether a certificate was given to the credit card issuer. Check the caution text for lines 1c and 2b before you claim them.

Keep Form 4136 with your return. IRS: About Form 4136

If you farm, see Schedule F (Form 1040). See Schedule 3 (Form 1040) for where the credit total goes on the return.

General information, not advice for your situation.

Sources: Sources: IRS, Form 4136 (2025), Credit for Federal Tax Paid on Fuels (https://www.irs.gov/pub/irs-pdf/f4136.pdf); IRS, About Form 4136 (https://www.irs.gov/forms-pubs/about-form-4136); IRS, Schedule 3 (Form 1040) 2025, line 12 (https://www.irs.gov/pub/irs-pdf/f1040s3.pdf) This is general information, not advice about your specific return.

← Back to the blog · Leer en español