PDF document

- 1 -

Low Sulfur Diesel Fuel Production Credit OMB No. 1545-1914
Form 8896
(Rev. December 2017) ▶ Attach to your tax return. Attachment
Department of the Treasury ▶ Go to www.irs.gov/Form8896 for the latest information. Sequence No. 142
Internal Revenue Service
Name(s) shown on return Identifying number

1 Low sulfur diesel fuel produced (in gallons) . . . . . . . . . . . . . . . . . . 1
2 Multiply line 1 by $0.05 . . . . . . . . . . . . . . . . . . . . . . . . 2
3 Qualified costs limitation (see instructions) . . . . . . . . . . . . . . . . . . 3
4 Total low sulfur diesel fuel production credits allowed for all prior tax years (see instructions) . 4
5 Subtract line 4 from line 3 . . . . . . . . . . . . . . . . . . . . . . . 5
6 Enter the smaller of line 5 or line 2 . . . . . . . . . . . . . . . . . . . . . 6
7 Low sulfur diesel fuel production credit from partnerships, S corporations, and cooperatives
(see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . 7
8 Add lines 6 and 7. Cooperatives, go to line 9. Partnerships and S corporations, stop here and
report this amount on Schedule K. All others, stop here and report this amount on Form 3800,
Part III, line 1m . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
9 Amount allocated to patrons of the cooperative (see instructions) . . . . . . . . . . 9
10 Cooperatives, subtract line 9 from line 8. Report this amount on Form 3800, Part III, line 1m . 10
General Instructions Qualified Costs
Section references are to the Internal Revenue Code unless For each facility, qualified costs are costs paid or incurred to
otherwise noted. comply with the highway diesel fuel sulfur control requirements
of the Environmental Protection Agency (EPA) during the period
Future Developments beginning January 1, 2003, and ending on the earlier of:
For the latest information about developments related to Form • The date 1 year after the date on which the refiner must
8896 and its instructions, such as legislation enacted after they comply with these EPA requirements with respect to such
were published, go to www.irs.gov/Form8896. facility; or
• December 31, 2009.
Purpose of Form
Qualified costs include costs for the construction of new
Use Form 8896 to claim the low sulfur diesel fuel production process operation units or the dismantling and reconstruction
credit. of existing process units to be used in the production of low
The credit generally is 5 cents for every gallon of low sulfur sulfur diesel fuel, associated adjacent or offsite equipment
diesel fuel produced by a qualified small business refiner during (including tankage, catalyst, and power supply), engineering,
the tax year. However, the total credits allowed for all tax years construction period interest, and site work.
cannot be more than the refiner’s qualified costs limitation on In addition, the small business refiner must obtain certification
line 3. This credit is part of the general business credit. from the IRS (which will consult with the EPA) that the
Partnerships, S corporations, and cooperatives must file this taxpayer’s qualified costs will result in compliance with the
form to claim the credit. All other taxpayers are not applicable EPA regulations. This certification must be obtained
required to complete or file this form if their only source for this not later than June 29, 2008, or, if later, the date that is 30
credit is a partnership, S corporation, or cooperative. months after the first day of the first tax year in which the credit
Instead, they can report this credit directly on line 1m in Part III is determined. For details, see Rev. Proc. 2007-69, 2007-49
of Form 3800, General Business Credit. I.R.B. 1137, available at
www.irs.gov/irb/2007-49_IRB#RP-2007-69.
Definitions Unless you elect not to take this credit, your
deductions will be reduced by the amount of your
Low Sulfur Diesel Fuel TIP credit. For details, see section 280C(d).
This is diesel fuel with a sulfur content of 15 parts per million or
less. Additional Information
Small Business Refiner For more information, see section 45H.
A small business refiner generally is a refiner of crude oil with an
average daily domestic refinery run or average retained Specific Instructions
production for all facilities that did not exceed 205,000 barrels
for the 1-year period ending on December 31, 2002. To figure Use lines 1 through 6 to figure any low sulfur diesel fuel
the average daily domestic refinery run or retained production, production credit from your own trade or business.
only include refineries that were refineries of the refiner or a
related person (within the meaning of section 613A(d)(3)) on Line 1
April 1, 2003. However, a refiner is not a small business refiner Enter the number of gallons of diesel fuel produced with a sulfur
for a tax year if more than 1,500 individuals are engaged in the content of 15 parts per million or less.
refinery operations of the business on any day during the tax
year.

For Paperwork Reduction Act Notice, see instructions. Cat. No. 37704F Form 8896 (Rev. 12-2017)

- 2 -

Form 8896 (Rev. 12-2017)                                                                                                        Page 2 
Line 3                                                               The cooperative is deemed to have made the election by 
                                                                     completing line 9. However, the election is not effective unless: 
Enter 25% of the qualified costs (defined earlier) for the facility 
that produced the fuel reported on line 1 if your average daily      • It is made on a timely filed return (including extensions), and
domestic refinery runs were not more than 155,000 barrels for        • The cooperative designates the apportionment in a written 
the 1-year period ending on December 31, 2002. If your average       notice or on Form 1099-PATR mailed to its patrons during the 
daily domestic refinery runs were more than 155,000 barrels, the     payment period described in section 1382(d).
25% is reduced (but not below zero) by multiplying it by 1 minus 
your excess over 155,000 barrels divided by 50,000 barrels.          If you timely file your return without making an election, you 
                                                                     can still make the election by filing an amended return within 6 
Example. Your average daily domestic refinery runs were              months of the due date of the return (excluding extensions). 
165,000 barrels for the 1-year period ending on December 31,         Write “Filed pursuant to section 301.9100-2” on the amended 
2002. First divide 10,000 (your excess over 155,000 barrels) by      return. 
50,000 to get 0.2. Next subtract 0.2 from 1 to get 0.8. Then 
multiply 25% by 0.8 to get 20%. On line 3, enter 20% of the          Once made, the election cannot be revoked. 
qualified costs for the facility that produced the fuel reported on 
line 1.                                                              Paperwork Reduction Act Notice.We ask for the information 
                                                                     on this form to carry out the Internal Revenue laws of the United 
Line 4                                                               States. You are required to give us the information. We need it 
Enter the total low sulfur diesel fuel production credits allowed    to ensure that you are complying with these laws and to allow 
for all prior tax years (as determined for line 6).                  us to figure and collect the right amount of tax. 
                                                                     You are not required to provide the information requested on 
Line 7                                                               a form that is subject to the Paperwork Reduction Act unless 
Enter total low sulfur diesel fuel production credits from:          the form displays a valid OMB control number. Books or 
• Schedule K-1 (Form 1065), Partner's Share of Income,               records relating to a form or its instructions must be retained as 
Deductions, Credits, etc., box 15 (code P);                          long as their contents may become material in the  
                                                                     administration of any Internal Revenue law. Generally, tax 
• Schedule K-1 (Form 1120S), Shareholder's Share of Income,          returns and return information are confidential, as required by 
Deductions, Credits, etc., box 13 (code P); and                      section 6103.  
• Form 1099-PATR, Taxable Distributions Received From                The time needed to complete and file this form will vary 
Cooperatives, box 10, or other notice of credit allocation.          depending on individual circumstances. The estimated burden 
Partnerships, S corporations, and cooperatives report the            for individual and business taxpayers filing this form is approved 
above credits on line 7. All other filers figuring a separate credit under OMB control number 1545-0074 and 1545-0123 and is 
on earlier lines also report the above credits on line 7. All others included in the estimates shown in the instructions for their 
not using earlier lines to figure a separate credit can report the   individual and business income tax return. The estimated 
above credits directly on Form 3800, Part III, line 1m.              burden for all other taxpayers who file this form is shown below.
Line 9                                                               Recordkeeping     .   .   .   . . .    . . .   .  .  2 hr., 52 min.
Cooperative election to allocate credit to patrons. A                Learning about the law or the form .     . .   .  . .  . 30 min.
cooperative described in section 1381(a) can elect to allocate       Preparing and sending the form to the IRS  .      . .  .  34 min.
any part of the low sulfur diesel fuel production credit to patrons  If you have comments concerning the accuracy of these time 
of the cooperative. The credit is allocated among the patrons        estimates or suggestions for making this form simpler, we would 
eligible to share in patronage dividends on the basis of the         be happy to hear from you. See the instructions for the tax  
quantity or value of business done with or for the patrons for the   return with which this form is filed. 
tax year. 
If the cooperative is subject to the passive activity rules, 
include on line 7 any Form 8896 credits from passive activities 
disallowed for prior years and carried forward to this year. 
Complete Form 8810, Corporate Passive Activity Loss and 
Credit Limitations, to determine the allowed credits that can be 
allocated to patrons. For details, see the Instructions for Form 
8810.

PDF file checksum: 3818735175

(Plugin #1/9.12/13.0)