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Form 8896: Low Sulfur Diesel Fuel Production Credit
IRS Form 8896 is used to claim the low sulfur diesel fuel production credit for partnerships, S corporations, cooperatives, and other taxpayers. The general credit amount is 5 cents for every gallon produced by a qualified small business refiner.
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IRS Form 8896 - Low Sulfur Diesel Fuel Production Credit
IRS Form 8896 is used to claim the low sulfur diesel fuel production credit for partnerships, S corporations, cooperatives, and other taxpayers. The general credit amount is 5 cents for every gallon produced by a qualified small business refiner.
Risk Radar
Scan points- 1Ensure you obtain IRS certification for qualified costs by June 29, 2008 (or later deadline).
- 2Filing for cooperatives without subtracting line 9 from line 8 first.
- 3Reporting credits directly on Form 3800, Part III, line 1m when a separate credit calculation is needed.
- 4Failing to obtain the required IRS certification of qualified costs by the deadline.
- 5Using an outdated version of Form 8896 not showing the revision date 12/19.
Plain English
This form allows taxpayers to claim a tax credit based on how much low sulfur diesel fuel they produce. Generally, the credit is worth 5 cents per gallon of this specific type of fuel. Taxpayers must file Form 8896 to formally request this credit from the IRS.
Submission Date
- Filing date: 2019-12-04 22:10:34
- Preparation window: collect IDs, supporting records, and signatures in advance.
- Final review: verify names, dates, and required fields before submission.
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What this form is for
- Use this form when claiming the low sulfur diesel fuel production credit, which generally equals $0.05 per gallon produced by a qualified small business refiner during the tax year.
- Do not use this form if your only source for the low sulfur diesel fuel production credit is a partnership, S corporation, or cooperative, as you can report it directly on Form 3800, Part III, line 1m.
- Check Form 3800 instead when reporting the credit directly on line 1m of Part III if filing for other entity types.
Form selector
Use this form or another form?
Filing as a Cooperative
The cooperative must subtract the amount allocated to patrons (line 9) from the total credits allowed (line 8) and report this final figure on Part III, line 1m.
✓ Check calculation for Line 10.
Filing as an S Corporation or Partnership
These entities must add their credit amount (Line 8) and stop there; they report the total directly on Schedule K of their return.
✓ Check that no further cooperative allocation is needed.
Filing for other taxpayers
Taxpayers who are not partnerships, S corporations, or cooperatives must also use Form 3800, Part III, line 1m to report the credit amount calculated on Line 8 of Form 8896.
✓ Check that you did not mistakenly stop at Line 8.
Cooperative Patrons' Allocation
Cooperatives must designate the apportionment in a written notice or on this form when mailing it to patrons during the payment period described in section 1382(d).
✓ Check if you are required to file a separate allocation document.
Deadline or filing window
The credit is generally claimed during the tax year of production. If a cooperative timely files without an election, it can still make that election by filing an amended return within 6 months of the due date (excluding extensions), writing “Filed pursuant to section 301.9100-2” on the amendment.
Checklist
What you need before filling it out
Low sulfur diesel fuel produced (Line 1)
Gallons of low sulfur diesel fuel · Form 8896, Line 1
Total credits allowed for all prior tax years (Line 4)
Total from previous years' filings · Form 8896, Line 4
Qualified costs limitation (Line 3)
The total allowable credit limit for all prior tax years is derived from this figure. · Form 8896, Line 3
Credit calculation (Line 2 & 5)
Multiply line 1 by $0.05; then subtract line 4 from line 3 to get line 5. · Form 8896, Lines 2 & 5
Final Credit Amount (Line 6)
Enter the smaller of line 5 or line 2. · Form 8896, Line 6
Cooperative Allocation (Line 9)
The amount allocated to patrons from the total credit on Line 8. · Form 8896, Line 9
Before you submit
- 1Verify that all amounts entered are for low sulfur diesel fuel with a sulfur content of 15 parts per million or less.
- 2Confirm the final credit reported on Line 6 is the smaller value between Line 5 (Qualified Costs minus Prior Credits) and Line 2 ($0.05 multiplied by gallons).
- 3If filing as a cooperative, ensure Line 9 accurately reflects the amount allocated to patrons.
- 4If filing as an S corporation or partnership, confirm you are stopping at Line 8 for reporting purposes.
- 5If filing as any other taxpayer, verify that the total credit reported on Line 8 is what needs to be transferred to Form 3800, Part III, line 1m.
- 6Ensure all figures used in calculations (Lines 1 through 9) are derived from costs incurred between January 1, 2003, and the specified end date.
- 7If an amended return is being filed, write “Filed pursuant to section 301.9100-2” on the form.
How to file this form
- 1Record the total low sulfur diesel fuel produced in gallons on Line 1 of Form 8896.
- 2Calculate and enter the potential credit amount by multiplying Line 1 by $0.05 onto Line 2.
- 3Enter the Qualified costs limitation for all facilities onto Line 3, ensuring this figure is based on EPA compliance requirements.
- 4Subtract the total low sulfur diesel fuel production credits from prior tax years (Line 4) from the amount on Line 3 to find the value on Line 5.
- 5Determine and enter the final credit amount on Line 6 by selecting the smaller of Line 5 or Line 2.
- 6If filing as a cooperative, calculate and report the patron allocation onto Line 9, then subtract this from Line 8 (the total credit) to find the final cooperative credit reported on Line 10.
- 7Sign and date Form 8896 before submitting it with your tax return.
Known limitations
- 1All other taxpayers are not required to complete or file Form 8896 if their sole source for the credit is a partnership, S corporation, or cooperative.
- 2For cooperatives subject to passive activity rules, any Form 8896 credits from passive activities disallowed in prior years and carried forward must be included on Line 7 of Form 8896.
- 3A cooperative elects to allocate the low sulfur diesel fuel production credit to patrons by completing Line 9 of Form 8896.
Field map
Compact field-by-field guide
Entity Info
1 items
Name and taxpayer ID of the entity claiming the credit.
Credit Info
1 items
Type of credit or incentive being claimed.
Calculation
2 items
The base amount used to calculate the credit.
Calculated credit amount after applying formulas and limitations.
Certification
1 items
Detailed breakdown supporting the credit calculation.
Signatures
1 items
Sign and date the form.
Almost done reviewing the fields?
Fillable formOpen in Editor->The current edition of IRS Form 8896 is December 2019. The form directs users to www.irs.gov/Form8896 for the latest information regarding developments.
What changed or needs a fresh check
- Edition date — confirm the revision date reads December 2019.
- OMB Number — confirm the OMB No. is 1545-1914.
- Tax Year Credit Rate — confirm the credit rate is $0.05 per gallon on line 2.
- Qualified Costs Period End Date — confirm costs are tracked up to the earlier of one year after compliance or December 31, 2009.
- Small Business Refiner Limit — confirm the average daily domestic refinery run/retained production did not exceed 205,000 barrels for the 1-year period ending on December 31, 2002.
Quick Facts
Downloads
After you file
- 1Keep a copy of the filed Form 8896.
- 2Retain books or records related to Form 8896 and its instructions as long as those contents may become material in the administration of any Internal Revenue law.
- 3If filing an amended return, write “Filed pursuant to section 301.9100-2” on the form.
- 4The election made by a cooperative on Line 9 cannot be revoked once completed.
Sources
- SRCForm 8896 is used to claim the low sulfur diesel fuel production credit.
- SRCThe general credit amount is $0.05 for every gallon produced by a qualified small business refiner during the tax year (Instructions p.1).
- SRCPartnerships, S corporations, and cooperatives must file Form 8896 to claim the credit (Instructions p.1).
- SRCThe total credits allowed cannot exceed the refiner’s qualified costs limitation on Line 3 (Instructions p.1).
- SRCLine 1 requires entering gallons of diesel fuel produced with a sulfur content of 15 parts per million or less (Form p.1).
- SRCLine 4 enters prior year total credits allowed, and Line 7 details where those credits came from for partnerships/S corps/cooperatives (Form p.2).
Common confusion points
Who must file Form 8896?
Partnerships, S corporations, and cooperatives must file this form to claim the credit.
→ Confirm your entity type matches one of these three.
How is the final credit amount determined on Form 8896?
The smaller amount between Line 5 (Qualified costs limitation minus prior year credits) or Line 2 (Gallons produced multiplied by $0.05) is entered on Line 6.
→ Check if Line 5 or Line 2 is smaller.
What goes on Line 7 of Form 8896?
It enters the total low sulfur diesel fuel production credits from specific sources: Schedule K-1 (Form 1065, box 15 code P), Schedule K-1 (Form 1120-S, box 13 code P), or Form 1099-PATR.
→ Verify the correct schedule/form and corresponding box number.
What is the general credit rate?
The credit generally is $0.05 for every gallon of low sulfur diesel fuel produced by a qualified small business refiner during the tax year.
→ Ensure your production qualifies as 'low sulfur' (15 parts per million or less).
When can a cooperative make its allocation election if it misses the deadline?
If you timely file without making an election, you may still elect it by filing an amended return within 6 months of the due date of the original return.
→ Check your filing date against the due date to see if an amendment is necessary.
What happens if a cooperative does not use prior lines to figure its credit?
It can report the total credits directly on Form 3800, Part III, line 1m.
→ Verify that you are not using Lines 1 through 5 for calculation.
Workflow map
Related forms and next steps
Current
After
Often used with
⚠ If something goes wrong
- If a cooperative needs to determine allowed credits for patron allocation, it uses Form 8810 (Corporate Passive Activity Loss and Credit Limitations).
Questions about IRS Form 8896
What is IRS Form 8896 used for?
This form allows taxpayers to claim a tax credit based on how much low sulfur diesel fuel they produce. Generally, the credit is worth 5 cents per gallon of this specific type of fuel. Taxpayers must file Form 8896 to formally request this credit from the IRS.
Who must file IRS Form 8896?
Partnerships, S corporations, and cooperatives must file Form 8896 to claim the low sulfur diesel fuel production credit. All other taxpayers are not required to complete or file the form if their only source for the credit is a partnership, S corporation, or cooperative.
What information does IRS Form 8896 require?
The form collects details on the credit from your own trade or business using lines 1 through 6. It also reports prior year credits on line 4 and credits received from partners/shareholders/cooperatives on line 7.
When is IRS Form 8896 due?
The official source does not state a specific filing deadline, but it notes that the required IRS certification for qualified costs must be obtained no later than June 29, 2008, or 30 months after the first day of the first tax year in which the credit is determined.
Where do I file IRS Form 8896?
The official source does not specify a service center address, but it directs users to www.irs.gov/Form8896 for the latest information regarding filing and developments.
How do I complete IRS Form 8896?
Taxpayers use lines 1 through 6 to calculate credits from their own operations first. If a cooperative is filing, it subtracts line 9 (patron allocation) from line 8 before reporting this final amount on Form 3800, Part III, line 1m. The form requires the taxpayer to sign it before sending.
What happens if IRS Form 8896 is filed incorrectly?
Unless the taxpayer elects not to take this credit, their deductions will be reduced by the amount of the credit claimed on Form 8896.
Who must file Form 8896?
Partnerships, S corporations, and cooperatives must file this form to claim the credit. Confirm your entity type matches one of these three.
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