Form 8864

Department of the Treasury

Internal Revenue Service

Name(s) shown on return Identifying number

(b)

RateCo

(a)

Number of Gallons

Sold or Used

Type of Biodiesel Fuel

1

Straight agri-biodiesel 2 $1.00

3 3

2

Biodiesel included in a biodiesel mixture

4 Agri-biodiesel included in an agri-biodiesel mixture 4

5

6

7

5

Biodiesel fuels credit(s) from a partnership, S corporation, estate, or trust (see instructions) 6

Current year credit. Add lines 5 and 6 7

Straight biodiesel 1 $ .50

Biodiesel Fuels Credit

 Attach to your tax return.

$ .50

$1.00

Allowable Credit (See Who must file Form 3800 to find out if you complete the lines below or 

For Paperwork Reduction Act Notice, see page 3. Cat. No. 25778F 

● Individuals. Enter the amount from Form 1040, line 43

8

Corporations. Enter the amount from Form 1120, Schedule J, line 3; Form 1120-A,

Part I, line 1; or the applicable line of your return

●

●

11a 11a

b Credits from Form 1040, lines 47 through 53 11b

11d

Foreign tax credit

d

f

Possessions tax credit (Form 5735, line 17 or 27)

Credit for fuel from a nonconventional source

Qualified electric vehicle credit (Form 8834, line 20)

Add lines 11a through 11e 11f

Net income tax. Subtract line 11f from line 10. If zero, skip lines 13 through 16 and enter -0- on line 17 12

9 Alternative minimum tax:

9

12

13 Net regular tax. Subtract line 11f from line 8. If zero or less, enter -0- 13

15 Tentative minimum tax (see instructions)

Subtract line 16 from line 12. If zero or less, enter -0-

16 16

Credit allowed for the current year. Enter the smaller of line 7 or line 17 here and on Form

1040, line 54; Form 1120, Schedule J, line 6d; Form 1120-A, Part I, line 2; Form 1041, Schedule

G, line 2c; or the applicable line of your return. If line 17 is smaller than line 7, see instructions 18

c 11c

8 Regular tax before credits:

10 Add lines 8 and 9 10

14

Enter the greater of line 14 or line 15

14

15

Estates and trusts. Enter the sum of the amounts from Form 1041, Schedule G, lines 1a

and 1b, or the amount from the applicable line of your return

Enter 25% (.25) of the excess, if any, of line 13 over $25,000 (see instructions)

17 17



18

e 11e

Part I

Part II

Current Year Credit

Individuals. Enter the amount from Form 6251, line 35

Corporations. Enter the amount from Form 4626, line 14

Estates and trusts. Enter the amount from Form 1041, Schedule I, line 56

●

●

● 

● The biodiesel fuels credit applies to fuel produced, and sold or used, after December 31, 2004, in tax y

December 31, 2004.

Caution:

● You cannot claim any amounts on Form 8864 that you claimed (or will claim) on Schedule C (Form 720

Form 4136.

Add lines 1 through 4. Include this amount in your income for 2004

Claimant has a certificate from the producer or importer of the biodiesel which identifies the percentage of biodiesel o

the product, and has no reason to believe the information in the certificate is false.
Form 8864 (2004) 

General Instructions

Purpose of Form

Use Form 8864 to figure your biodiesel fuels credit. You

claim the credit for the tax year in which the sale or use

occurs. This credit consists of the:

Definitions and Special Rules

Biodiesel

Diesel Fuel Recapture of Credit

● Separate the biodiesel from the mixture,

● Use the mixture other than as a fuel,

● Mix straight biodiesel on which the credit 

the retail sale, or

● Use the straight biodiesel other than as a 

Report the tax on Form 720, Quarterly Fe

Return.

● Biodiesel (or agri-biodiesel) mixture credit, and

● Biodiesel (or agri-biodiesel) credit.

Agri-Biodiesel

Section references are to the Internal Revenue Code.

Biodiesel means the monoalkyl esters of long chain fatty

acids derived from plant or animal matter which meet the

registration requirements for fuels and fuel additives

established by the Environmental Protection Agency (EPA)

under section 211 of the Clean Air Act, and the requirements

of the American Society of Testing and Materials (ASTM)

D6751.

Agri-biodiesel means biodiesel derived solely from virgin oils,

including esters derived from virgin vegetable oils from corn,

soybeans, sunflower seeds, cottonseeds, canola, crambe,

rapeseeds, safflowers, flaxseeds, rice bran, and mustard

seeds, and from animal fats.

Diesel fuel means any liquid that, without further processing

or blending, is suitable for use as a fuel in a diesel-powered

highway vehicle or diesel-powered train. A liquid is suitable

for this use if the liquid has practical and commercial fitness

for use in the propulsion engine of a diesel-powered highway

vehicle or diesel-powered train. A liquid may possess this

practical and commercial fitness even though the specified

use is not the liquid’s predominant use. However, a liquid

does not possess this practical and commercial fitness solely

by reason of its possible or rare use as a fuel in the

propulsion engine of a diesel-powered highway vehicle or

diesel-powered train. Diesel fuel does not include gasoline,

kerosene, excluded liquid (defined below), No. 5 and No. 6

fuel oils covered by ASTM specification D 396, or F-76 (Fuel

Naval Distillate) covered by military specification

MIL-F-16884.

You must pay a tax on each gallon of biodi

biodiesel in the mixture) at the rate you use

credit if you:

Additional Information

See Pub. 378, Fuel Tax Credits and Refund

Coordination With Excise Tax Credit

Only one credit may be taken with respect 

biodiesel. If any amount is claimed (or will b

respect to any gallon of biodiesel on Form 7

Federal Excise Tax Return, Form 8849, Clai

Excise Taxes, or Form 4136, Credit for Fed

Fuels, then a claim cannot be made on For

gallon of biodiesel.

Caution: Before claiming a credit on Form 8864, the qualified

biodiesel mixture credit should be taken against any section

4081 liability on Form 720. Any credit in excess of the section

4081 liability can be taken as a claim for payment on Form

8849 or as an income tax credit on Form 4136.

Certification

You must obtain and keep as part of your r

certification from the producer or importer o

The certificate is required for any credit clai

The certificate must identify the product pro

percentage of biodiesel and agri-biodiesel in 

the producer or importer of the biodiesel is 

claiming the biodiesel credit, the certificate 

See Publication 510, Excise Taxes for 2005

for a model certificate.

Biodiesel (or Agri-Biodiesel) Mixture

The biodiesel (or agri-biodiesel) must be used to make a

qualified mixture. A qualified mixture combines biodiesel

(or agri-biodiesel) with diesel fuel (defined below), determined

without regard to any use of kerosene. The producer of the

mixture either:

● Used it as fuel, or

● Sold it as fuel to another person.

The credit is available only to the producer who blends the

mixture. The producer must use or sell the mixture in a trade

or business and the credit is available only for the year the

mixture is sold or used. The credit is not allowed for casual

off-farm production of a qualified mixture.

Registration

All producers and importers of biodiesel mu

with the IRS by July 1, 2005. See Form 637

Registration (For Certain Excise Tax Activitie

An excluded liquid is any liquid that (a) co

4% normal paraffins, or (b) has a (i) distillati

125° F or less, (ii) sulfur content of 10 parts 

less, and (iii) minimum color of +27 Saybolt

Straight Biodiesel (or Agri-Biodiesel)

● Used as a fuel in a trade or business, or

● Sold at retail to another person and put in 

that person’s vehicle.

The biodiesel must not be a mixture. The cr

biodiesel (or agri-biodiesel) which during the 

However, no credit is allowed for biodiese

agri-biodiesel) you used as a fuel in a trade 

that biodiesel (or agri-biodiesel) was sold in 

described above.

Caution: You may be liable for a 24.4 cents 

tax on the biodiesel used in a qualified biod

agri-biodiesel mixture that you used or sold 

trade or business. Report the tax liability on 

line for IRS No. 60(c), for the quarter in whic

was sold or used. For more information, see 

for Form 720.
Line 7

Form 8864 (2004) 

Part II—Allowable Credit

The credit allowed for the current year may be limited based

on your tax liability. Use Part II to figure the allowable credit

unless you must file Form 3800, General Business Credit.

● A carryback or carryforward of any of those credits.

● More than one credit included in the general business

credit (other than a credit from Form 8844, Form 8884, or

Section B of Form 8835), or

● A biodiesel fuels credit from a passive activity,

Who must file Form 3800. You must file Form 3800 if you

have:

Include this amount in income, under “other income” on the

applicable line of your income tax return, even if you cannot

use all of the credit because of the tax liability limit. However,

if you are subject to alternative minimum tax (AMT), this

amount is not income in computing AMT and must be

subtracted when figuring your alternative minimum taxable

income. Do this by including this amount on line 26 of

Form 6251, line 23 of Schedule I, Form 1041, or line 2o of

Form 4626.

For an estate or trust, the credit on line 7 is allocated

between the estate or trust and the beneficiaries in

proportion to the income allocable to each. In the margin to

the right of line 7, the estate or trust should enter its part of

the total credit. Label it “1041 Portion” and use this amount

in lines 8 through 18 (or Form 3800) to figure the credit to

claim on Form 1041. Also, enter and identify the total

beneficiaries’ share of the credit to the right of line 7 and

attach a schedule showing how the total credit was divided.

See the instructions for Form 3800 for a list of credits

included in the general business credit.

Line 15

Although you may not owe AMT, you gener

compute the tentative minimum tax (TMT) to 

credit. For a small corporation exempt from 

section 55(e), enter zero. Otherwise, comple

applicable AMT form or schedule. Enter on 

from the line shown below.

Line 14

See section 38(c)(5) for special rules that ap

couples filing separate returns, controlled co

regulated investment companies, real estate 

trusts, and estates and trusts.

Line 18

● Individuals: Form 6251, line 33.

● Corporations: Form 4626, line 12.

● Estates and trusts: Form 1041, Schedule 

If you cannot use all of the credit because o

limit (line 17 is smaller than line 7), carry the 

forward up to 20 years. See the instructions 

for details.

Line 6

Enter the amount of credit that was allocated to you as a

shareholder, partner, or beneficiary.

Paperwork Reduction Act Notice. We ask 

information on this form to carry out the Int

laws of the United States. You are required 

information. We need it to ensure that you a

with these laws and to allow us to figure an

amount of tax.

The time needed to complete and file this 

depending on individual circumstances. The 

average time is:

Recordkeeping 

Learning about the

law or the form 

Preparing and sending the form

to the IRS 

If you have comments concerning the acc

time estimates or suggestions for making th

we would be happy to hear from you. See t

the tax return with which this form is filed.

You are not required to provide the inform

on a form that is subject to the Paperwork 

unless the form displays a valid OMB contr

or records relating to a form or its instructio

retained as long as their contents may beco

the administration of any Internal Revenue l

returns and return information are confident

section 6103.

Line 5

Note. Any unused credit cannot be carried 

year ending before 2005.

Skip lines 1 through 5 if you are claiming only a credit that

was allocated to you from a pass-through entity (that is, an

S corporation, partnership, estate, or trust).

Part I—Current Year Credit

Use lines 1 through 5 to figure any biodiesel fuels credit from

your own trade or business.

S Corporations, Partnerships, Estates, and Trusts

Figure the total credit on lines 1 through 7. Then, allocate the

line 7 credit to each shareholder, partner, and beneficiary in

the same way that income and loss are divided. Electing

large partnerships include this credit in “general credits.”

Specific Instructions