Off-Highway Fuel Use Credits — My Vehicle Qualifies … Now What?

Article

Learn how to claim a tax credit or refund for off-highway fuel use, including eligibility, required forms and documentation to avoid IRS rejections.

4 minute read

August 6, 2025

Leanne Sobel

Partner-in-Charge, Energy Compliance Services - Motor Fuels and Excise Tax

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Understanding how to claim an off-highway fuel credit can be a complex process, especially after confirming your vehicle qualifies. While those steps are critical to getting started, the next move is key: ensuring you file the claim correctly to maximize your potential refund or credit.

How to Claim an Off-Highway Fuel Credit or Refund

A federal tax credit may be claimed in multiple ways using either Form 720 (Quarterly Federal Excise Tax Return), Form 4136 (Credit for Federal Tax Paid on Fuels) or Form 8849 (Claim for Refund of Excise Taxes). The ultimate purchaser is the only person eligible to make the claim, and the amount of the claim must be at least $750. A statement explaining the claims needs to be included. The claimant must also have the name and address of the person who sold the fuel and the dates of purchases. Documentation is retained to show tax was remitted to the supplier.

On Form 720, a credit may be claimed against the excise tax liability. Form 720 is filed on a quarterly basis and the claim is made on Schedule C.

If a company does not file a Form 720, then either Form 4136, included annually with the income tax return, or Form 8849 may be used. Form 8849 may be filed more frequently, which speeds up the refund process. Form 8849 has shorter statute of limitations and all transactions need to be included for the period because an amendment cannot be filed. Only one claim may be made per quarter and the claim must be filed during the first quarter following the last quarter included in the claim. If a transaction is missed, then it would go on Form 4136.

Avoiding Common Filing Mistakes

Correct documentation must be included with each claim. A claimant must be careful when filing for a refund/credit. If the correct documentation is not included, then the claim may be rejected, and it can take months to rectify the situation with the Internal Revenue Service. Additionally, if the claim is not filed on time or does not include all the transactions, then the taxpayer risks losing the refund/credit.

Weaver’s motor fuels and excise tax team has extensive experience with filing claims and working with the IRS. Contact us for support through this complex process.

Authored by Kelly Grace and Leanne Sobel

Off-Highway Fuel Credits and Refunds Series

Our series explores off-highway fuel credits and refunds, covering key topics like navigating IRS rules, how different states handle these credits and tips for substantiating off-road claims. Whether you’re aiming to maximize tax benefits or ensure compliance with regulations, this series will provide the guidance you need.

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