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Department of the Treasury
Internal Revenue Service
Instructions for Form 8864

(Rev. January 2020)
Biodiesel and Renewable Diesel Fuels Credit

Section references are to the Internal Revenue Code Definitions and Special Rules
unless otherwise noted.
Certification
Future Developments
To claim a credit on lines 1 through 6, you generally must
For the latest information about developments related to
attach the Certificate for Biodiesel and, if applicable,
Form 8864 and its instructions, such as legislation
Statement of Biodiesel Reseller, to Form 8864. To claim a
enacted after they were published, go to IRS.gov/
credit on line 3 or 6, the certificate must indicate at all
Form8864.
appropriate locations that the fuel to which it relates is
What's New renewable diesel and state that the fuel meets the
requirements discussed under Renewable Diesel, later.
Credit extension. The section 40A biodiesel and However, if the certificate or statement was attached to a
renewable diesel fuels credit is retroactively extended for previously filed claim, attach a statement with the
fuel sold or used in calendar years 2018 through 2022. following information.
Don’t claim the credit for biodiesel and renewable diesel • Certificate identification number.
fuels sold or used after 2022, unless the credit is extended • Total gallons of agri-biodiesel, biodiesel other than
again. agri-biodiesel, or renewable diesel on the certificate.
Periodic updating. Form 8864 and its instructions will no • Total gallons claimed on Schedule 3 (Form 8849),
longer be updated annually. Instead, they’ll only be Certain Fuel Mixtures and the Alternative Fuel Credit.
updated when necessary. Use these instructions and • Total gallons claimed on Form 720, Quarterly Federal
Form 8864 (Rev. January 2020) for tax years beginning Excise Tax Return, Schedule C.
after 2017. • Total gallons claimed on Form 4136, Credit for Federal
Tax Paid on Fuels.
For previous years, see the applicable Form 8864 and
instructions. See Notice 2005-62, 2005-35 I.R.B. 443, or Pub. 510,
Excise Taxes, for the model certificate and statement.
Example 1. Use the 2017 Form 8864 with the 2017
Instructions for Form 8864 for tax year ending December Biodiesel
31, 2017. Biodiesel means the monoalkyl esters of long-chain fatty
For 2018 claims, use Form 8864 (Rev. January acids derived from plant or animal matter that meet the
TIP 2020) because it has lines 1 through 8 available, if registration requirements for fuels and fuel additives
needed. established by the Environmental Protection Agency
(EPA) under section 211 of the Clean Air Act, and the
requirements of the American Society of Testing and
General Instructions Materials (ASTM) D6751.

Purpose of Form Biodiesel includes both agri-biodiesel and biodiesel
Use Form 8864 (Rev. January 2020) to claim your section other than agri-biodiesel. Biodiesel does not include the
40A biodiesel and renewable diesel fuels credit. Claim the following.
credit for the tax year in which the sale or use occurs. The • Fuel produced outside the United States or a U.S.
credit consists of the: possession for use as a fuel outside the United States or a
• Biodiesel credit, U.S. possession.
• Renewable diesel credit, • Any liquid that is eligible for the section 40 biofuel
• Biodiesel mixture credit, producer credit (Form 6478, Biofuel Producer Credit).
• Renewable diesel mixture credit, and
Agri-Biodiesel
• Small agri-biodiesel producer credit.
Agri-biodiesel means biodiesel derived solely from virgin
Partnerships, S corporations, cooperatives, estates, oils, including esters derived from virgin vegetable oils
and trusts must file this form to claim the credit. All other from corn, soybeans, sunflower seeds, cottonseeds,
taxpayers aren’t required to complete or file this form if canola, crambe, rapeseeds, safflowers, flaxseeds, rice
their only source for this credit is a partnership, S bran, mustard seeds, and camelina, and from animal fats.
corporation, cooperative, estate, or trust. Instead, they
can report this credit directly on the appropriate line of Renewable Diesel
Form 3800, General Business Credit. Renewable diesel means liquid fuel derived from biomass
Example 2. For 2018, report this credit on the 2018 (defined below) that meets the registration requirements
Form 3800, Part III, line 1l; for 2019, report this credit on for fuels and fuel additives established by the EPA under
the 2019 Form 3800, Part III, line 1l. section 211 of the Clean Air Act, and the requirements of
the ASTM D975 or D396, or other equivalent standard

Jan 18, 2020 Cat. No. 66373S

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approved by the IRS, or a Department of Defense Diesel fuel. Diesel fuel means:
specification for military jet fuel, or an ASTM specification • Any liquid that, without further processing or blending,
for aviation turbine fuel. For aviation uses, treat kerosene is suitable for use as a fuel in a diesel-powered highway
as diesel fuel when figuring a renewable diesel mixture vehicle or diesel-powered train; and
credit. • Transmix.
Renewable diesel does not include the following. A liquid is suitable for this use if the liquid has practical
• Fuel produced outside the United States or a U.S. and commercial fitness for use in the propulsion engine of
possession for use as a fuel outside the United States or a a diesel-powered highway vehicle or diesel-powered train.
U.S. possession. A liquid may possess this practical and commercial fitness
• Any fuel derived from co-processing biomass with even though the specified use is not the liquid's
feedstock that is not biomass. predominant use. However, a liquid does not possess this
• Any liquid eligible for the section 40 biofuel producer practical and commercial fitness solely by reason of its
credit (Form 6478). possible or rare use as a fuel in the propulsion engine of a
Biomass. Biomass means any organic material other diesel-powered highway vehicle or diesel-powered train.
than oil, natural gas, or coal (including lignite), or any Diesel fuel does not include gasoline, kerosene, excluded
product of them. liquid, No. 5 and No. 6 fuel oils covered by ASTM
specification D396, or F-76 (Fuel Naval Distillate) covered
Biodiesel and Renewable Diesel Credits by military specification MIL-F-16884.
The biodiesel or renewable diesel reported on lines 1 An excluded liquid is any liquid that (a) contains less
through 3 must not be a mixture. The credits are for than 4% normal paraffins; or (b) has a (i) distillation range
biodiesel or renewable diesel, which during the tax year of 125 degrees Fahrenheit or less, (ii) sulfur content of 10
you: parts per million or less, and (iii) minimum color of +27
• Used as a fuel in a trade or business, or Saybolt. For example, biodiesel is always an excluded
• Sold at retail to another person and put in the fuel tank liquid because it does not contain paraffins. However, a
of that person's vehicle. biodiesel mixture may not be an excluded liquid.
However, no credit is allowed for fuel used in a trade or Transmix means a by-product of refined products
business that was purchased in a retail sale described created by the mixing of different specification products
above. during pipeline transportation.

You may be liable for a 24.4 cents per gallon Qualified Agri-Biodiesel Production
! excise tax on biodiesel or renewable diesel you Qualified agri-biodiesel production means up to 15 million
CAUTION sold (in your trade or business) for use or used in gallons of agri-biodiesel that is produced by an eligible
a diesel-powered highway vehicle or diesel-powered train. small agri-biodiesel producer (defined below), and that
Report the tax liability on Form 720 on the line for IRS No. during the tax year:
79 for the quarter in which the biodiesel was sold or used, 1. Is sold by such producer to another person:
or IRS No. 60(b) for the quarter in which the renewable
diesel was sold or used. a. For use by such person in the production of a
qualified biodiesel mixture in such other person's trade or
business (other than casual off-farm production),
Biodiesel and Renewable Diesel Mixture Credits
b. For use by such person as a fuel in a trade or
The biodiesel or renewable diesel reported on lines 4
business, or
through 6 must be used to make a qualified mixture. A
qualified mixture combines biodiesel or renewable diesel c. Who sells such agri-biodiesel at retail to another
with diesel fuel (defined below), determined without person and places such agri-biodiesel in the fuel tank of
regard to any use of kerosene. However, treat the such other person; or
kerosene as diesel fuel when figuring a renewable diesel 2. Is used or sold by such producer for any purpose
mixture credit for certain aviation fuel (see Renewable described in (1).
Diesel above). The producer of the mixture either: Note. Production of renewable diesel is not qualified
• Used it as fuel, or agri-biodiesel production.
• Sold it as fuel to another person.
The credit is available only to the producer of the Eligible small agri-biodiesel producer. An eligible
mixture. The producer must use or sell the mixture in a small agri-biodiesel producer is a person who, at all times
trade or business and the credit is available only for the during the tax year, has a productive capacity for
year the mixture is sold or used. The credit is not allowed agri-biodiesel not in excess of 60 million gallons.
for casual off-farm production of a qualified mixture. Aggregation rule. All members of the same controlled
You may be liable for a 24.4 cents per gallon group of corporations (see section 267(f)) and all persons
under common control (see section 52(b) but treat an
! excise tax on biodiesel or renewable diesel used interest of more than 50% as a controlling interest) are
CAUTION to produce blended taxable fuel outside the bulk
transfer terminal system if the mixture is diesel fuel. treated as 1 person for purposes of the 15- and
Report the tax liability on Form 720 on the line for IRS No. 60-million-gallon limits.
60(c) for the quarter in which the mixture was sold or Partnership, S corporation, and other pass-through
used. entities. The 15- and 60-million-gallon limits discussed

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above are applied at both the entity level and at the production and the 60-million-gallon productive capacity
partner or similar level. limitation for an eligible small agri-biodiesel producer.

Registration Line 10
All producers and importers of biodiesel or renewable For 2018, report this amount on the 2018 Form 3800, Part
diesel must be registered with the IRS. All persons III, line 1l; for 2019, report this amount on the 2019 Form
producing blended taxable fuel must be registered. See 3800, Part III, line 1l.
Form 637, Application for Registration. At the time this form went to print, the 2020 and
later year tax forms hadn't been developed. Go to
Coordination With Excise Tax Credit CAUTION!
IRS.gov/F8864 later this year to determine which
Only one credit may be taken with respect to any amount line to use.
of biodiesel or renewable diesel. If any amount is claimed
(or will be claimed) with respect to any amount of
Line 11
biodiesel or renewable diesel on Form 720, Form 8849,
Claim for Refund of Excise Taxes, or Form 4136, then a A cooperative, estate, or trust allocating the small
claim cannot be made on Form 8864 for that amount of agri-biodiesel credit must give the patron or beneficiary a
biodiesel or renewable diesel. statement providing them with the number of gallons for
which it claimed the credit and its productive capacity for
Recapture of Credit agri-biodiesel. An estate or trust must also provide the
You must pay a tax (recapture) on each gallon of biodiesel amount of the small agri-biodiesel credit included as part
or renewable diesel on which a credit was claimed at the of the pass-through credit. See the above instructions for
rate used to figure the credit if you: line 9.
• Use it (including a mixture) other than as a fuel, Cooperatives. A cooperative described in section
• Buy it at retail and use it to create a mixture, 1381(a) can elect to allocate any part of the small
• Separate it from a mixture, or agri-biodiesel producer credit to patrons of the
• Use agri-biodiesel on which the small agri-biodiesel cooperative. The credit is allocated pro rata among the
producer credit was claimed for a use not described under patrons eligible to share in patronage dividends on the
Qualified Agri-Biodiesel Production, earlier. basis of the quantity or value of business done with or for
the patrons for the tax year.
Report the tax on Form 720, Part II, IRS No. 117, for the
quarter in which you did any of the above. If the cooperative is subject to the passive activity rules,
include on line 9 any Form 8864 credits from passive
Additional Information activities disallowed for prior years and carried forward to
See Pub. 510, Excise Taxes. this year. Complete Form 8810, Corporate Passive
Activity Loss and Credit Limitations, to determine the
allowed producer credits that can be allocated to patrons.
Specific Instructions For details, see the Instructions for Form 8810.
The cooperative is deemed to have made the election
Use lines 1 through 8 to figure any biodiesel and
by completing line 11. However, the election is not
renewable diesel fuels credit from your own trade or
effective unless:
business.
• It is made on a timely filed return (including extensions);
Skip lines 1 through 8 if you are claiming only a credit that and
was allocated to you from a pass-through entity (that is, an • The cooperative designates the apportionment in a
S corporation, partnership, estate, trust, or cooperative). written notice or Form 1099-PATR, Taxable Distributions
Received From Cooperatives, mailed to its patrons during
Line 8 the payment period described in section 1382(d).
Include this amount in income, under “other income” on If you timely filed your return without making an
the applicable line of your income tax return, even if you election, you can still make the election by filing an
cannot use all of the credit because of the tax liability limit. amended return within 6 months of the due date of the
However, if you are subject to alternative minimum tax return (excluding extensions). Enter “Filed pursuant to
(AMT), this amount is not income in figuring AMT and section 301.9100-2” on the amended return.
must be subtracted when figuring your alternative
Once made, the election cannot be revoked.
minimum taxable income. Do this by including this amount
on the appropriate line of: Estates and trusts. Allocate the biodiesel and
• Form 6251, Alternative Minimum Tax—Individuals renewable diesel fuels credit on line 10 between the
• Form 1041, Schedule I estate or trust and the beneficiaries in the same proportion
as income was allocated and enter the beneficiaries’
Line 9 share on line 11.
If you are allocated a small agri-biodiesel producer credit If the estate or trust is subject to the passive activity
from a pass-through entity, the entity must tell you the rules, include on line 9 any Form 8864 credits from
number of gallons for which it claimed the credit and its passive activities disallowed for prior years and carried
productive capacity for agri-biodiesel. You, as a forward to this year. Complete Form 8582-CR, Passive
shareholder, partner, beneficiary, or patron are subject to Activity Credit Limitations, to determine the allowed credit
the 15-million-gallon limitation for qualified agri-biodiesel

Instructions for Form 8864 (1-2020) -3-

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that must be allocated between the estate or trust and the              At the time this form went to print, the 2020 and 
beneficiaries. For details, see the Instructions for Form       !       later year tax forms hadn't been developed. Go to 
8582-CR.                                                        CAUTION IRS.gov/F8864 later this year to determine which 
                                                            line to use.
Line 12
For 2018, report this amount on the 2018 Form 3800, Part 
III, line 1l; for 2019, report this amount on the 2019 Form 
3800, Part III, line 1l.

                                                            -4-                      Instructions for Form 8864 (1-2020)

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Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws of the
United States. You are required to give us the information. We need it to ensure that you are complying with these laws
and to allow us to figure and collect the right amount of tax.
You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act
unless the form displays a valid OMB control number. Books or records relating to a form or its instructions must be
retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax
returns and return information are confidential, as required by section 6103.
The time needed to complete and file this form will vary depending on individual circumstances. The estimated burden
for individual taxpayers filing this form is approved under OMB control number 1545-0074 and is included in the
estimates shown in the instructions for their individual income tax return. The estimated burden for all other taxpayers
who file this form is shown below.

Recordkeeping 1 hr., 25 min.
Learning about the law or the form 45 min.
Preparing and sending the form to the IRS 2 hr., 01 min.

If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler,
we would be happy to hear from you. See the instructions for the tax return with which this form is filed.

Instructions for Form 8864 (1-2020) -5-

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