IRS Instruction 4136 – IRS Forms, Instructions, Pubs 2026 – The IRS Form 4136 (Credit for Federal Tax Paid on Fuels) lets businesses and certain individuals recover federal excise taxes paid on gasoline, diesel, kerosene, alternative fuels, and other fuels used in nontaxable ways. For tax year 2025, many mixture and alternative fuel credits expired after 2024, but substantial credits remain for off-highway business use, farming, aviation, exports, and specific bus or government uses.
This guide draws directly from the official 2025 Instructions for Form 4136 (revised December 2025) and the form itself. Use it to determine eligibility, complete the form correctly, and avoid common errors that trigger IRS review or denial.
Who Qualifies for the Fuel Tax Credit on Form 4136?
You qualify if you:
- Owned or operated a business with qualifying nontaxable fuel use.
- Answer “Yes” on Part I, line A of Form 4136.
- Did not already claim the same gallons on Form 8849, Form 720 Schedule C, or Form 8864.
Special case — Home heating with undyed kerosene (other than from a blocked pump): Answer “Yes” on line A, skip most of Part I, and go straight to line 4a in Part II.
Partnerships (except electing large partnerships) do not file Form 4136. They allocate credits to partners on Schedule K-1.
If you have multiple businesses or activities, file a separate Schedule A (Form 4136) for each one.
Qualifying Fuels and Types of Use (2025 Rates)
The credit equals the federal tax you paid multiplied by the number of qualified gallons (or gasoline/diesel gallon equivalents for CNG, LPG, LNG).
| Line | Fuel / Use | Key Rates (per gallon or GGE/DGE) | Common Type-of-Use Numbers |
|---|---|---|---|
| 1 | Gasoline | $0.183 (most uses), $0.184 (export) | 1 (farm), 2 (off-highway business), 3 (export) |
| 2 | Aviation Gasoline | $0.193 (nontaxable), $0.194 (export) | 3, 10 |
| 3 | Undyed Diesel | $0.243 (most), $0.244 (export), $0.17 (certain buses) | 1–5, 8, 9 |
| 4 | Undyed Kerosene (non-aviation) | $0.243 (most), $0.244 (export) | 1–5 |
| 5 | Kerosene Used in Aviation | $0.200 / $0.175 (commercial), $0.243 / $0.218 (nontaxable) | 10 |
| 11 | Alternative Fuels (LPG, CNG, LNG, etc.) | $0.183–$0.243 (varies by fuel) | 5 (certain buses – reduced rate) |
| 14 | Diesel-Water Fuel Emulsion | $0.197 (nontaxable), $0.198 (export) | Most uses |
| 16 | Exported Dyed Fuels / Blendstocks | $0.001 | Export only |
Full Type-of-Use Table (must match one of these):
- On a farm for farming purposes
- Off-highway business use
- Export
- Commercial fishing boat
- Certain intercity/local buses
- Qualified local bus
- School buses
- Non-fuel use in trains or diesel highway vehicles (not off-highway)
- Foreign trade
- Certain helicopter/fixed-wing aircraft
11–16. Exclusive use by blood collectors, U.S. government, nonprofits, states, aircraft museums, military aircraft
Key Changes for Tax Year 2025
- Biodiesel, renewable diesel, alternative fuel, and alternative fuel mixture credits expired after 2024.
- Sustainable aviation fuel (SAF) credit on Form 4136 is no longer available after 2024 (use Form 720 instead).
- New column (d) on Part II: Report the actual fuel cost from your records (helps IRS verify reasonableness).
- E-filed returns that include Form 4136 cannot be accepted before February 22, 2026.
Step-by-Step: How to Fill Out Form 4136 (2025)?
- Part I – Information About Your Business
- Line A: “Yes” if you qualify.
- Lines B–F: Business name, activity, EIN, 6-digit NAICS code, and description of equipment/vehicles that used the most fuel.
- Schedule A (Form 4136) – Business Activity Report (attach one per business/activity)
- Enter the same business details as Part I.
- Use a separate Schedule A for each distinct business or activity.
- Part II – Credits
- For each claim: Enter type-of-use number (column a), rate (b), gallons/GGE/DGE (c), actual cost (d), credit amount (c × b), and CRN (f).
- Lines 10 and 12 are reserved.
- Attach explanations or certificates when required (dye status, export proof, Form 637 registration, etc.).
- Line 17 → Total credit → Transfer to:
- Schedule 3 (Form 1040), line 12
- Form 1120 Schedule J, line 20b
- Form 1120-S, line 24c
- Form 1041 Schedule G, line 17
- Or the proper line on other returns.
Recordkeeping & Proof Requirements (Critical!)
Keep for at least 3 years:
- Gallons purchased and used
- Dates and purpose of use
- Export documentation (bill of lading, customs forms)
- Form 637 registration number (for ultimate vendor/credit card issuer claims)
- Certificates/waivers (Model Certificate P, Waiver N, etc.)
- Actual fuel cost records (new 2025 requirement)
Warning — Falsely claiming the credit can result in penalties and interest.
Common Mistakes to Avoid
- Claiming personal commuting, ride-sharing, or registered highway vehicles.
- Double-claiming the same gallons on Form 720/8849.
- Forgetting column (d) actual cost.
- Missing export proof or dye-status explanations.
- Filing before February 22, 2026 (e-filed returns with Form 4136).
Download the Official 2025 Forms & Instructions
- Form 4136 → https://www.irs.gov/pub/irs-pdf/f4136.pdf
- Instructions → https://www.irs.gov/pub/irs-pdf/i4136.pdf
- Schedule A → https://www.irs.gov/pub/irs-pdf/f4136sa.pdf
For detailed definitions and Pub. 510 (Excise Taxes), see IRS.gov.
Final Tip
The fuel tax credit is one of the most overlooked business tax breaks. If you operate farm equipment, construction machinery, boats, planes, or export fuels, run the numbers — even a few thousand gallons can generate a meaningful refund.
Always use the 2025 versions of the forms and consult a tax professional if your situation involves Form 637 registration, large claims, or multiple entities.
Last updated: February 2026 (based on December 2025 IRS revisions). Always verify the latest instructions on IRS.gov before filing.