Iowa Tax Form IA-4136 - Computation of Motor Fuel Tax Credit Instructions

INSTRUCTIONS FOR COMPLETING FORM IA 4136

WHO MAY CLAIM CREDIT 

Resident and nonresident individuals, fiduciaries of estates and trusts, and corporations other than S corporations may claim a tax credit on their income tax returns for fuel on which Iowa fuel tax was paid and used off-highway in an unlicensed vehicle.

This fuel tax credit is NOT available for casualty losses, transport diversions, pumping credits, blending errors, idle time, power take-offs, reefer units, exports by distributors, or excess tax paid on gasohol/E85.

The income tax credit may be claimed by partners of a partnership or shareholders of an S corporation. If a partner or shareholder is claiming an income tax credit for fuel purchased by a partnership or S corporation, a supplementary schedule must be attached to the individual return (in addition to form IA 4136) showing the name of the partnership or S corporation, the Federal Taxpayer Identification Number (T.I.N.) of that entity, the total amount of gallons purchased, the method of distribution, and the number of gallons to be claimed by each individual partner or shareholder.

NAME: Enter the name of the person or business claiming the credit as shown on the front of your income tax return.

S.S.N. or FEDERAL T.I.N.: Enter Social Security Number or Federal Taxpayer Identification Number (for businesses) in this space. Do not enter your cancelled motor fuel tax refund permit number.

FUEL USED: Mark the proper box(es) to indicate how the fuel was used. Review your invoices to verify that Iowa fuel tax was paid before claiming a credit. This area must be completed. Note: Dyed Diesel Fuel is always sold Iowa fuel tax free. No credit may be claimed for Dyed Diesel Fuel.

CREDIT COMPUTATION: Please be sure to calculate a credit in all applicable column(s), A through G.

Line 1

Enter in the proper column(s) the total number of gallons of fuel from your paid fuel invoices, on which Iowa fuel tax was paid and which were placed in your fuel storage tanks during the tax year. Invoices must be kept for three years after your return is filed as proof of your credit. Gasoline or special fuel used in motor vehicles for off-loading procedures or used in watercraft, other than for commercial fishing, should not be included.

Line 2

Enter in the proper column(s) the number of gallons which were used on the highway and were included on line 1.

Line 3

Subtract line 2 from line 1 and enter on line 3. This is the gallonage to be claimed for credit.

Line 4

Multiply the amount(s) on line 3 by the fuel tax rate(s) listed below and enter in the proper column(s) on line 4.

Fuel type
Date of Purchase
Fuel tax rate
Gasoline 1/1/07- 6/30/07 21.0¢ per gallon
Gasoline 7/1/07- 12/31/07 20.7¢ per gallon
Gasohol entire year 19¢ per gallon
E85 1/1/07- 6/30/07 17¢ per gallon
E85 7/1/07- 12/31/07 19¢ per gallon
Undyed Diesel Fuel entire year 22.5¢ per gallon
Special Fuel (LPG) entire year 20¢ per gallon

NOTE: The tax rate on gasoline and E85 changed on July 1, 2007.

Line 5

Sales tax is applicable on all fuel claimed for credit except that used in farming and processing. To compute the sales tax, calculate the average cost per gallon of the fuel purchased minus the per gallon state fuel tax and multiply by the number of gallons claimed for credit on line 3. Multiply this average cost by the 5% sales tax rate. Enter sales tax in the proper column(s) on line 5.

Line 6

Subtract line 5 from line 4 and enter in the proper column(s).

Line 7

Add line 6 columns A through G and enter on line 7. This is your Motor Fuel Tax Credit. Enter this amount on the Motor Fuel Tax Credit line of your Iowa Income Tax Return.