Iowa Computation of Iowa Motor Fuel Tax Credit 41-036

Computation of Iowa Motor Fuel Tax Credit 41-036
2023 IA 4136 Fuel Tax Credit (41036)
2023 IA 4136

Iowa Fuel Tax Credit
tax.iowa.gov
Legal name: ______________________________________________________________________________
Doing business as: _______________________________________________________________________
Federal Employer Identification Number (FEIN) or Social Security Number (SSN): _______________________
Pass-through entity (if applicable):_____________________________________________________________
Pass-through FEIN: ___________________________________ Tax period ending date: ________________
Check appropriate box(es):
Fuel used for: 1. Farming ☐

2. Commercial ☐

3. Commercial fishing ☐

4. Other ☐
(specify) _______________

1. Gasoline
Invoice
Date
01/01/2023
to end of
tax year

Invoice
Gallons

Highway
Gallons

Claimed
Gallons

Sales
Tax

Tax Rate

Fuel Tax
Paid

$0.300

$

Tax Rate

Fuel Tax
Paid

$0.300

$

Tax Rate

Fuel Tax
Paid

$0.240

$

$

$

$0.245

$

$

$

Tax Rate

Fuel Tax
Paid

$

Fuel Tax
Credit
$

2. Ethanol Blended Gasoline – E-10 to E-14
Invoice
Date
01/01/2023
to end of
tax year

Invoice
Gallons

Highway
Gallons

Claimed
Gallons

Sales
Tax
$

Fuel Tax
Credit
$

3. Ethanol Blended Gasoline – E-15 or Higher

3a.
3b.

Invoice
Date
01/01/2023
to
06/30/2023

Invoice
Gallons

Highway
Gallons

Claimed
Gallons

07/01/2023
to end of
tax year

4. Undyed Diesel Fuel – B-0 to B-10
Invoice
Invoice
Highway
Date
Gallons
Gallons
01/01/2023
to end of
tax year

Claimed
Gallons

$0.325

$

Sales
Tax

Sales
Tax
$

Fuel Tax
Credit

Fuel Tax
Credit
$

41-036a (07/24/2023)

2023 IA 4136, page 2
5. Undyed Biodiesel Fuel – Blends B-11 or Higher
Invoice
Date

Invoice
Gallons

Highway
Gallons

Claimed
Gallons

Tax
Rate

Sales
Tax

Fuel Tax
Paid

Fuel Tax
Credit

5a.

01/01/2023
to
06/30/2023

$0.301

$

$

$

5b.

07/01/2023
to end of
tax year

$0.298

$

$

$

6. Special Fuel – Liquified Petroleum Gas (LPG)
Invoice
Date
01/01/2023
to end of
tax year

Invoice
Gallons

Highway
Gallons

Claimed
Gallons

Tax
Rate
$0.300

Sales
Tax

Fuel Tax
Paid
$

$

Fuel Tax
Credit
$

7. Fuel Tax Credit
Add Fuel Tax Credit columns from lines 1 through 6. See Where to Report This
Tax Credit in instructions....................................................................................................7. $ __________
8. Pass-through Fuel Tax Credit received from partnership, limited liability company (LLC),
S corporation, estate, or trust.
See Where to Report This Tax Credit in instructions. ........................................................8. $ __________

41-036b (07/24/2023)

2023 IA 4136 Instructions, page 1
What’s New for Tax Year 2023
Effective July 1, 2023, the fuel tax rates for E-15 or
higher and B-11 or higher have changed. All other
fuel types are unchanged.
About the Iowa Fuel Tax Credit
Ethanol Blended Gasoline is separated into two
different categories: E-10 to E-14 and E-15 or higher
(including E-85).
Taxpayers 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.
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.
Dyed diesel fuel is always sold free of Iowa fuel tax.
No Fuel Tax Credit may be claimed for dyed diesel
fuel.
All undyed special fuel used in watercrafts is
eligible for the Fuel Tax Credit; however, gasoline
used in a watercraft does not qualify for the tax
credit unless the watercraft was used by a
commercial fisher licensed and operating under an
owner’s certificate for commercial fishing gear
issued pursuant to Iowa Code section 482.7.
Pass-Through Entities – Allocation of Tax
Credit
The tax credit calculated on lines 1 through 7 by a
pass-through entity (partnership, LLC, S
corporation, estate, or trust) is allocated to the
members. The tax credit allocation must be in the
ratio of each member’s share of the earnings of the
entity to the entity’s total earnings. Special
allocations are not permitted. The pass-through
entity must file the IA 4136 and the federal 4136
with its return.
Report the tax credit to the Department and to
members as instructed (see Where to Report This
Tax Credit).
If the taxpayer earns a tax credit and is a member
of a pass-through entity that has passed through a

tax credit to the taxpayer, calculate the tax credit on
IA 4136, lines 1 through 7 and enter the passthrough tax credit on line 8. Report each tax credit
separately.
Claiming This Tax Credit
Federal Employer ID Number or Social Security
Number: Enter your Federal Employer ID Number
(FEIN) or Social Security Number (SSN). Do not
enter your canceled fuel tax refund permit number.
Fuel Used For: 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
tax credit. This area must be completed.
Lines 1-6: Invoice Gallons - Based on the invoice
date, enter the total number of whole gallons of fuel
purchased on which Iowa fuel tax was paid during
your tax year. Invoices must be issued in the name
of the taxpayer or entity claiming the tax credit.
Retain invoices for three years after your return is
filed.
Highway Gallons - Enter the number of whole
gallons included in invoice gallons that were used
on the highway.
Claimed Gallons - Subtract highway gallons from
invoice gallons to calculate claimed gallons.
Fuel Tax Paid - Multiply the claimed gallons by the
appropriate tax rate per gallon in each row.
Sales Tax - Iowa sales tax is owed on all fuel
claimed for the tax credit except that used in
exempt activities such as farming and processing.
To compute sales tax, within each row, calculate
the average cost per gallon of fuel purchased
minus the relevant per gallon Iowa fuel tax. Multiply
the result by the claimed gallons. Multiply this
amount by the Iowa sales tax rate of 6% to
calculate the sales tax owed.
Fuel Tax Credit - Subtract sales tax from the fuel
tax paid. Any Fuel Tax Credit claimed must be net
of sales tax owed.
Line 8: If the taxpayer has received any passthrough Fuel Tax Credit from a partnership, LLC, S
corporation, estate, or trust, enter that amount on
this line. File a separate IA 4136 for each passthrough Fuel Tax Credit received and provide the
required information regarding the pass-through
entity. See Where to Report This Tax Credit.
Include this form and the federal 4136 with your
IA 1040, IA 1041, IA 1120, IA 1120S, or IA 1065.
41-036c (07/24/2023)

2023 IA 4136 Instructions, page 2

Where to Report This Tax Credit
Iowa
Form:

Enter the sum of
amounts from lines
7 and 8 on:

1040

Main return, Step 6,
line 23

1120

Main return
Schedule C1, line 1

1041

Main return, line 42
(amounts claimed
at entity level)

Additional Instructions:

•

If any amount of the tax credit is allocated to beneficiaries, do all
of the following:
o Report the allocated share of line 7 and 8 amounts on each
beneficiary’s IA 1041 Schedule K-1 using tax credit code
4136. List each tax credit claim earned or received
separately.
o Instruct beneficiaries to report their allocated tax credit on
line 8 of form IA 4136 and include the IA 4136 with their
return.

•

Report line 7 and 8 amounts on the IA 1065 Schedule B as
earned by the entity (line 7) or received from another pass-through
entity (line 8) and use tax credit code 4136. Also, report each
member’s allocated share of the tax credit on the IA 1065
Schedule K-1 using tax credit code 4136. List each tax credit
claim earned or received separately on Schedule B and Schedule
K-1.
Instruct members to report their allocated tax credit on line 8 of
form IA 4136, and include the IA 4136 with their return.

and
IA 1041
Schedule K-1
(amounts allocated
to beneficiaries)
1065

Main return
Schedule B
and
IA 1065
Schedule K-1

1120S

Main return
Schedule B

•

•

and
IA 1120S
Schedule K-1

•

Report line 7 and 8 amounts on the IA 1120S Schedule B as
earned by the entity (line 7) or received from another pass-through
entity (line 8) and use tax credit code 4136. Also, report each
member’s allocated share of the tax credit on the IA 1120S
Schedule K-1 using tax credit code 4136. List each tax credit
claim earned or received separately on Schedule B and Schedule
K-1.
Instruct members to report their allocated tax credit on line 8 of
form IA 4136 and include the IA 4136 with their return.

41-036d (07/24/2023)