Iowa Motor Fuel Tax Credit Computation - Fuel Used

Effective July 1, 2020, the fuel tax rate for Gasoline changed as a result of a calculated change to the fuel distribution percentage. Rates for all other fuel types were unchanged.

Resident and nonresident individuals, fiduciaries of estates and trusts, and C corporations may claim a tax credit on their income tax returns for fuel that was purchased during the tax period to be used in unlicensed vehicles for non-highway purposes.

A partnership, LLC, S corporation, estate, or trust with fuel purchased during the tax period for use in unlicensed vehicles for non-highway purposes is eligible for a tax credit that is apportioned to the members. The pass-through entity must file the IA 4136 with its return. On IA Schedule K-1 or on an attachment to IA Schedule K-1, report the tax credit for each member and instruct the members to report the apportioned tax credit on line 6 of form IA 4136 and include it with their tax returns.

Include a copy of the IA 4136 and federal Form 4136 with your return.

If you filed a fuel tax refund claim during the tax year, you cannot also claim a Fuel Tax Credit; your refund permit will become invalid if you claim a Fuel Tax Credit. However, the Fuel Tax Credit is not available for casualty losses, transport diversions, idle time, pumping credits, off-loading procedures, reefer units, blending errors, power take-offs, ready mix, solid waste, export by distributors, or tax overpaid on blended fuel. A refund can be claimed for those reasons alongside the Fuel Tax Credit.

https://tax.iowa.gov/sites/default/files/2021-01/2020IA4136%2841036%29.pdf