Form 8864: Biodiesel and Renewable Diesel Fuels Credit

Form 8864 is an Internal Revenue Service (IRS) document used to calculate and claim the Biodiesel and Renewable Diesel Fuels Credit for the tax year in which the sale or use of the fuel occurred. This credit incentivizes the use of clean, renewable fuels by reducing income tax liability for qualified individuals and businesses.

What are Biodiesel and Renewable Diesel Fuels?

A. Biodiesel: A clean-burning fuel produced from vegetable oils, animal fats, and recycled greases.

B. Renewable Diesel: A fuel derived from renewable biomass sources like plant oils and animal fats. It meets the same standards as petroleum diesel but offers lower greenhouse gas emissions.

Who can claim the credit?

  • Businesses that sell or use qualified biodiesel or renewable diesel fuels.
  • Individuals who use B100 biodiesel in their trade or business.
  • Qualified small agri-biodiesel producers.

What Credits are Available on Form 8864?

The form allows you to claim various credits associated with biodiesel and renewable diesel fuels:

  • Biodiesel Credit: Applies to pure, unblended biodiesel (B100).
  • Renewable Diesel Credit: Applies to fuels derived from biomass that meet EPA standards.
  • Biodiesel Mixture Credit: Applies to blends of biodiesel and diesel fuel.
  • Renewable Diesel Mixture Credit: Applies to blends of renewable diesel and other liquid fuels (excluding renewable diesel itself).
  • Small Agri-Biodiesel Producer Credit: Available to qualified small producers of agri-biodiesel.

What type of biodiesel qualifies for the credit?

The biodiesel used must meet the American Society for Testing and Materials (ASTM) Standard D6751 and meet EPA registration requirements for fuels and fuel additives.

What type of renewable diesel qualifies for the credit?

The renewable diesel must be derived from biomass, meet EPA registration requirements, and conform to ASTM Standards D975 or D396 (or an equivalent IRS-approved standard).

Can I claim the credit if I bought biodiesel at a retail pump?

Only the seller who directly placed the B100 fuel into your vehicle's tank can claim the credit in this scenario.

Has the Biodiesel and Renewable Diesel Fuels Credit expired?

The credit was initially set to expire in 2017 but has been extended. As of April 2024, you can claim the credit for fuel sold or used through December 31, 2024, thanks to Public Law 117-169.