OMB No. 1545-1924

Form 8864

Department of the Treasury

Internal Revenue Service Attachment

Sequence No. 141

Name(s) shown on return Identifying number

(b)

Rate

(c)

Column (a) x Column (b)

(a)

Number of Gallons

Sold or Used

Type of Fuel

1

Agri-biodiesel 2 $1.00

4

4

2

Biodiesel (other than agri-biodiesel) included in a biodiesel 

mixture

5 Agri-biodiesel included in a biodiesel mixture 5

8

9

10

8

9

Biodiesel and renewable diesel fuels credit from partnerships, S corporations, cooperatives,

estates, and trusts

Add lines 8 and 9. Cooperatives, estates, and trusts, go to line 11; partnerships and S corporations, 

report this amount on Schedule K; all others, report this amount on Form 3800, line 1p 10

Biodiesel (other than agri-biodiesel) 1 $ .50

Biodiesel and Renewable Diesel Fuels Credit

© Attach to your tax return.

$ .50

$1.00

Caution: You cannot claim any amounts on Form 8864 that you claimed (or will claim) on Schedule C (Form 720), Form 8849,

or Form 4136.

Add lines 1 through 7. Include this amount in your income for 2006 (see instructions)

Claimant has a certificate from the producer or importer of biodiesel or renewable diesel reported on lines 1 through 6 below and, if

applicable, claimant also has a statement from the reseller. Claimant has no reason to believe that the information in the certificate or

statement is false. Claimant may need to attach a copy of the certificate and statement. See Certification below.

2006

3 Renewable diesel 3 $1.00

6 Renewable diesel included in a renewable diesel mixture 6

7 Qualified agri-biodiesel production (gallons sold) 7

$1.00

$ .10

Amount allocated to patrons of the cooperative or beneficiaries of the estate or trust

Cooperatives, estates, and trusts. Subtract line 11 from line 10. Report this amount on Form 3800, 

line 1p

11

12

11

12

For Paperwork Reduction Act Notice, see instructions. Cat. No. 25778F Form 8864 (2006)

General Instructions

Purpose of Form

Use Form 8864 to figure your biodiesel and renewable

diesel fuels credit. Claim the credit for the tax year in

which the sale or use occurs. This credit consists of the:

Definitions and Special Rules

Biodiesel

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.

● Biodiesel credit,

● Renewable diesel credit,

● Biodiesel mixture credit,

● Renewable diesel mixture credit, and

● Small agri-biodiesel producer credit.

To claim a credit on lines 1, 2, 4, or 5, you generally

must attach the Certificate for Biodiesel and, if

applicable, Statement of Biodiesel Reseller, to Form

8864. To claim a credit on lines 3 or 6, you generally

must attach a certificate from the producer identifying

the product as renewable diesel and, if applicable, a

statement from the reseller. However, if the certificate

or statement was attached to a previously filed claim,

attach a separate sheet with the following information.

● Total gallons of agri-biodiesel, biodiesel other than

agribiodiesel, or renewable diesel on the certificate.

● Total gallons claimed on Schedule 3 (Form 8849).

● Total gallons claimed on Schedule C (Form 720).

● Total gallons claimed on Form 4136.

See Notice 2005-62 on page 443 of Internal Revenue

Bulletin 2005-35 or Publication 510, Excise Taxes for

2007, for the model certificate and statement.

● Certificate identification number.

What’s New

Certification

Biodiesel includes both agri-biodiesel and biodiesel

other than agri-biodiesel.

The tax liability limit is no longer figured on this form;

instead, it must be figured on Form 3800, General

Business Credit.
Form 8864 (2006) Page 2

Diesel fuel. Diesel fuel means:

Biodiesel and Renewable Diesel Mixture Credits

The biodiesel or renewable diesel reported on lines 4

through 6 must be used to make a qualified mixture. A

qualified mixture combines biodiesel or renewable

diesel 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 of 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.

Biodiesel and Renewable Diesel Credits

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

● Sold at retail to another person and put in the fuel

tank of that person’s vehicle.

The biodiesel or renewable diesel reported on lines 1

through 3 must not be a mixture. The credits are for

biodiesel or renewable diesel which during the tax year

you:

However, no credit is allowed for fuel used in a trade

or business that was purchased in a retail sale

described above.

Caution: You may be liable for a 24.4 cents per gallon

excise tax on biodiesel or renewable diesel you sold (in

your trade or business) for use or used in a

diesel-powered highway vehicle or diesel-powered

train. Report the tax liability on Form 720 on the line for

IRS No. 79 for the quarter in which the biodiesel was

sold or used and IRS No. 60(b) for the quarter in which

the renewable diesel was sold or used.

● 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, and

Renewable Diesel

Renewable diesel means diesel fuel derived from

biomass (defined below) using a thermal

depolymerization process which meets the registration

requirements for fuels and fuel additives established by

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

the requirements of the ASTM D975 or D396.

Biomass. Biomass means any organic material other

than oil and natural gas (or any product thereof) and

coal (including lignite) or any product thereof.

Caution: You may be liable for a 24.4 cents per gallon

excise tax on biodiesel or renewable diesel used to

produce blended taxable fuel outside the bulk transfer

terminal system if the mixture is diesel fuel. Report the

tax liability on Form 720 on the line for IRS No. 60(c)

for the quarter in which the mixture was sold or used.

● Transmix.

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

Registration

All producers and importers of biodiesel or renewable

diesel must be registered with the IRS. All persons

producing blended taxable fuel must be registered. See

Form 637, Application for Registration (For Certain

Excise Tax Activities).

An excluded liquid is any liquid that (a) contains less

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

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

per million or less, and (iii) minimum color of +27

Saybolt. For example, biodiesel is always an excluded

liquid because it does not contain paraffins. But a

biodiesel mixture may not be an excluded liquid.

Transmix means a by-product of refined products

created by the mixing of different specification

products during pipeline transportation.

Qualified Agri-Biodiesel Production

Qualified agri-biodiesel production means up to 15

million gallons of agri-biodiesel which is produced by

an eligible small agri-biodiesel producer (defined

below), and which during the tax year:

1. Is sold by such producer to another person:

a. For use by such person in the production of a

qualified biodiesel mixture in such other person’s trade

or business (other than casual off-farm production),

b. For use by such person as a fuel in a trade or

business, or

c. Who sells such agri-biodiesel at retail to another

person and places such agri-biodiesel in the fuel tank

of such other person, or

2. Is used or sold by such producer for any purpose

described in (1).

Eligible small agri-biodiesel producer. An eligible

small agri-biodiesel producer is a person who, at all

times during the tax year, has a productive capacity for

agri-biodiesel not in excess of 60 million gallons.

Partnership, S corporation, and other pass-through

entities. The 15 and 60 million gallon limits discussed

above are applied at both the entity level and at the

partner or similar level.

Aggregation rule. All members of the same controlled

group of corporations (see section 267(f)) and all

persons under common control (see section 52(b) but

treat an interest of more than 50% as a controlling

interest) are treated as 1 person for purposes of the 15

and 60 million gallon limits.

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, No. 5 and No. 6 fuel oils covered by

ASTM specification D396, or F-76 (Fuel Naval Distillate)

covered by military specification MIL-F-16884.
Form 8864 (2006) Page 3

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.

Line 9

Line 8

Use lines 1 through 8 to figure any biodiesel and

renewable diesel fuels credit from your own trade or

business.

Specific Instructions

Recapture of Credit

Report the tax on Form 720, Quarterly Federal Excise

Tax Return.

Additional Information

See Pub. 510, Excise Taxes for 2007.

You must pay a tax on each gallon of biodiesel or

renewable diesel on which a credit was claimed at the

rate used to figure the credit if you:

● Use it (including a mixture) other than as a fuel,

● Buy it at retail and use it to create a mixture,

● Separate it from a mixture, or

● Use agri-biodiesel on which the small agri-biodiesel

producer credit was claimed for a use not described

under Qualified Agri-Biodiesel Production above.

Skip lines 1 through 8 if you are claiming only a

credit that was allocated to you from a pass-through

entity (that is, an S corporation, partnership, estate,

trust, or cooperative).

If you are allocated a small agri-biodiesel producer

credit from a pass-through entity, the entity must tell

you the number of gallons for which it claimed the

credit and its productive capacity for agri-biodiesel.

You, as a shareholder, partner, beneficiary, or patron,

are subject to the 15 million gallon limitation for line 7

and the 60 million gallon productive capacity limitation

for an eligible small agri-biodiesel producer.

Line 11

A cooperative, estate, or trust allocating the small

agri-biodiesel credit must give the patron or beneficiary

a statement providing them with the number of gallons

for which it claimed the credit and its productive

capacity for agri-biodiesel. An estate or trust must also

Paperwork Reduction Act Notice. We ask for the

information on this form to carry out the Internal

Revenue laws of the United States. You are required to

give us the information. We need it to ensure that you

are complying with these laws and to allow us to figure

and collect the right amount of tax.

The time needed to complete and file this form will

vary depending on individual circumstances. The

estimated burden for individual taxpayers filing this

form is approved under OMB control number

1545-0074 and is included in the estimates shown in

the instructions for their individual income tax return.

The estimated burden for all other taxpayers who file

this form is shown below.

Learning about the

law or the form 57 min.

Preparing and sending the form

to the IRS 2 hrs., 20 min.

If you have comments concerning the accuracy of

these time estimates or suggestions for making this

form simpler, we would be happy to hear from you.

See the instructions for the tax return with which this

form is filed.

You are not required to provide the information

requested on a form that is subject to the Paperwork

Reduction Act unless the form displays a valid OMB

control number. Books or records relating to a form or

its instructions must be retained as long as their

contents may become material in the administration of

any Internal Revenue law. Generally, tax returns and

return information are confidential, as required by

section 6103.

Cooperatives. A cooperative described in section

1381(a) can elect to allocate any part of the small

agri-biodiesel producer credit among the patrons of

the cooperative. The credit is allocated among the

patrons eligible to share in patronage dividends on the

basis of the quantity or value of business done with or

for such patrons for the tax year.

Estates and trusts. Allocate the biodiesel and

renewable diesel fuels credit on line 10 between the

estate or trust and the beneficiaries in the same

proportion as income was allocated and enter the

beneficiaries’ share on line 11.

The cooperative is deemed to have made the

election by completing line 11. However, the election is

not effective unless (a) made on a timely filed return

(including extensions) and (b) the organization

designates the apportionment in a written notice

mailed to its patrons during the payment period

described in section 1382(d).

If you timely file your return without making an

election, you can still make the election by filing an

amended return within 6 months of the due date of the

return (excluding extensions). Enter “Filed pursuant to

section 301.9100-2” on the amended return.

Once made, the election cannot be revoked.

Coordination With Excise Tax Credit

Only one credit may be taken with respect to any

amount of biodiesel or renewable diesel. If any amount

is claimed (or will be claimed) with respect to any

amount of biodiesel or renewable diesel on Form 720,

Quarterly Federal Excise Tax Return, Form 8849, Claim

for Refund of Excise Taxes, or Form 4136, Credit for

Federal Tax Paid on Fuels, then a claim cannot be

made on Form 8864 for that amount of biodiesel or

renewable diesel.

provide the amount of the small agri-biodiesel credit

included as part of the pass-through credit. See the

above instructions for line 9.

Recordkeeping 8 hrs., 36 min.