Treasury Clarifies Rules for Claiming Alternative Fuel Credits

On September 26, 2022, the Department of the Treasury (Treasury) issued a notice explaining how eligible entities can claim the Alternative Fuel tax credit and Alternative Fuel Mixture tax credit. Those credit were previously due to expire on December 31, 2021 but were extended through December 31, 2024 by the IRA. The Treasury notice provides instructions on how taxpayers can claim one-time credits under sections 6426(d) and 6427(e) of the Internal Revenue Code for alternative fuels sold or used during the first, second, and third quarters of calendar year 2022. The also provides instructions for how a taxpayer’s liability for the excise tax imposed by section 4081 can be reduced by claiming the alternative fuel mixture credit allowable under section 6426(e) for the first and second calendar quarters of 2022.