Fuel Tax Credit

Businesses get a refundable credit for fuel used in a specific work-related activity with the Fuel Tax Credit.

To qualify, you must:

• Own or operate a business
• Meet certain requirements, such as running a farm or purchasing aviation gasoline

The Fuel Tax Credit is not available to most taxpayers. Don’t be fooled by misleading social media advice. Check if you’re eligible.

Types of fuels and uses

The credit is available only for nontaxable uses of gasoline, aviation gasoline, undyed diesel and undyed kerosene. Nontaxable uses are purposes where fuel isn’t used for regular driving purposes, such as:

• On a farm for farming purposes
• Off-highway business use (for equipment, machines, vehicles and tools that operate on private property, farms, or construction sites, not public roads)
• Commercial fishing
• Certain types of buses (intercity, local, or school)
• On a farm for farming purposes
• Off-highway business use (for equipment, machines, vehicles and tools that operate on private property, farms, or construction sites, not public roads)
• Commercial fishing
• Certain types of buses (intercity, local, or school)

Find a complete list of eligible types of uses in instructions for Form 4136, Credit for Federal Tax Paid on Fuels.

Off-highway business use of gasoline

The Fuel Tax Credit does not apply to off-highway business use of gasoline for:

• Vehicles used for personal use or commuting to work
• Non-business, off-highway use (minibikes, snowmobiles, power lawn mowers, chain saws and other yard equipment)
• Other vehicles that are registered or required to be registered to drive on public highways