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(s) from a partnership, S corporation, estate, trust, or

cooperative (see instructions)

Current year credit. Add lines 8 and 9. (S corporations, partnerships, estates, and trusts, see

instructions.) 10

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

Biodiesel and Renewable Diesel 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 file Form 3800.)

For Paperwork Reduction Act Notice, see page 4. Cat. No. 25778F Form 8864 (2005)

● Individuals. Enter the amount from Form 1040, line 44

11

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

●

●

14a 14a

b Credits from Form 1040, lines 48 through 54 14b

14d

Foreign tax credit

d

f

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

Nonconventional source fuel credit (Form 8907, line 23)

Other specified credits (see instructions)

Add lines 14a through 14e 14f

Net income tax. Subtract line 14f from line 13. If zero, skip lines 16 through 19 and enter -0- on line 20 15

12 Alternative minimum tax:

12

15

16 Net regular tax. Subtract line 14f from line 11. If zero or less, enter -0- 16

18 Tentative minimum tax (see instructions)

Subtract line 19 from line 15. If zero or less, enter -0-

19 19

Credit allowed for the current year. Enter the smaller of line 10 or line 20 here and on Form

1040, line 55; 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 20 is smaller than line 10, see instructions 21

c 14c

11 Regular tax before credits:

13 Add lines 11 and 12 13

17

Enter the greater of line 17 or line 18

17

18

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 16 over $25,000 (see instructions)

20 20



21

e 14e

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

●

●

● 

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 2005 (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 on page 2.

2005

3 Renewable diesel sold or used after December 31, 2005 3 $1.00

6

6

Renewable diesel included in a renewable diesel mixture

sold or used after December 31, 2005

7

7 Qualified agri-biodiesel production (gallons sold)

(cooperatives, see instructions for election)

$1.00

$ .10
Form 8864 (2005) Page 2

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.

Diesel fuel. Diesel fuel means:

Biodiesel and Renewable Diesel Mixture Credits

The biodiesel or renewable diesel 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 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.

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 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 used or sold for use

in your trade or business in a diesel-powered highway vehicle

or diesel-powered train. Report the tax liability on Form 720

on the line for IRS No. 60(b) for the quarter in which the

biodiesel or 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,

● Biodiesel credit,

● Renewable diesel credit,

● Biodiesel mixture credit,

● Renewable diesel mixture credit, and

● Small agri-biodiesel producer credit.

Small agri-biodiesel producer credit allowed prior to your

2005 tax year. This credit is allowed for gallons sold in tax

years ending after August 8, 2005. If you have a credit that

occurs in your tax year beginning in 2004 and ending after

August 8, 2005, include this credit on line 5 of the 2004 Form

8864. Enter “SABPC” and the amount of the credit on the

dotted line to the left of the entry space for line 5. Attach a

statement showing the information requested on line 7 of this

form and file it with your original or amended tax return.

To claim a credit on lines 1, 2, 4, or 5, for biodiesel sold or

used through August 29, 2005, you must obtain and keep as

part of your records a certificate from the producer or

importer of the biodiesel. For biodiesel sold or used after

August 29, 2005, you generally must attach the revised

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 2006,

for model certificates and statements.

● Certificate identification number.

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.

What’s New

The IRS issued Notice 2005-62 to clarify the biodiesel

certificate rules and require copies of certificates to be

attached to Form 8864 in certain situations. The Energy Tax

Incentives Act of 2005 amended section 40A to add credits

for renewable diesel fuel sold or used after December 31,

2005. The Act also added a small agri-biodiesel producer

credit for tax years ending after August 8, 2005.

Certification

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

tax on biodiesel or renewable diesel used to produce a

mixture 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.

Biodiesel includes both agri-biodiesel and biodiesel other

than agri-biodiesel.
Form 8864 (2005) 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

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

shareholder, partner, beneficiary, or patron.

Line 8

Use lines 1 through 8 to figure any biodiesel and renewable

diesel fuels credit from your own trade or business.

Part I. Current Year Credit

Specific Instructions

Recapture of Credit

Report the tax on Form 720, Quarterly Federal Excise Tax

Return.

Additional Information

See Pub. 510, Excise Taxes for 2006.

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.

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.

You must pay 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 later:

● 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.

Line 7

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.

To make an election, attach a statement to your timely

filed return (including extensions) indicating the amounts you

would report on line 7 of Form 8864 without an election and

the amounts you are electing to allocate to patrons. Enter on

line 7 any amounts that will not be allocated.

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.

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, 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.

● Transmix, and

● Diesel fuel blendstocks (when identified by the IRS).

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).
Form 8864 (2005) Page 4

● 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 6478, or

Section B of Form 8835), or

● A biodiesel and renewable diesel fuels credit from a

passive activity,

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

have:

See the Instructions for Form 3800 for a list of credits

included in the general business credit.

Line 18

Although you may not owe AMT, you generally must still

compute the tentative minimum tax (TMT) to figure your

credit. For a small corporation exempt from the AMT under

section 55(e), enter -0-. Otherwise, complete and attach the

applicable AMT form or schedule. Enter on line 18 the TMT

from the line shown below.

Line 14e

Include on line 14e any amounts claimed on:

Line 21

● Individuals: Form 6251, line 33.

● Corporations: Form 4626, line 12.

● Estates and trusts: Form 1041, Schedule I, line 54.

If you cannot use all of the credit because of the tax liability

limit (line 20 is smaller than line 10), carry the unused credit

back 1 year and then forward up to 20 years. See the

Instructions for Form 3800 for details.

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.

Recordkeeping 8 hrs., 36 min.

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.

Note. Any unused renewable diesel credit claimed on lines 3

or 6 cannot be carried back to a tax year ending before

2006. Any unused small agri-biodiesel producer credit

claimed on line 7 cannot be carried back to a tax year

ending before August 9, 2005.

Printed on Recycled Paper

Line 10

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.

S corporations and partnerships. Allocate the line 10 credit

among the shareholders or partners. Show the credit for

each shareholder or partner on Schedule K-1. Electing large

partnerships include this credit in “general credits.”

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 17

See section 38(c)(5) for special rules that apply to married

couples filing separate returns, controlled corporate groups,

regulated investment companies, real estate investment

trusts, and estates and trusts.

● Form 8834, Qualified Electric Vehicle Credit, line 20,

● Form 8910, Alternative Motor Vehicle Credit, line 18, and

● Form 8911, Alternative Fuel Vehicle Refueling Property

Credit, line 19.

Estates and trusts. Allocate the line 10 credit between the

estate or trust and the beneficiaries in proportion to the

income allocable to each. In the margin to the right of line

10, the estate or trust should enter its part of the total

biodiesel and renewable fuels credit. Label it “1041 portion”

and use this amount in Part II (or on Form 3800, if required)

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 10 and attach a schedule showing how the total credit

was divided.