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IRS Releases Guidance: Claiming 2015 Alternative Fuel Tax Credit

The Internal Revenue Service released guidance on how to claim the federal Alternative Fuel Tax Credit, which was retroactively extended on Dec. 18 of last year by Congress as part of the Protecting Americans from Tax Hikes (PATH) Act of 2015. The credit allows operators of propane autogas vehicles and propane forklifts to claim 50 cents for every gallon of the alternative fuel they used in 2015.

The PATH Act actually approved the tax credit for gallons consumed in 2016 as well, but the IRS has not published its official guidance on how the credit may be claimed for the current year.

“For fleet managers, propane autogas vehicles offer the lowest total cost of ownership and one way to maximize the financial benefit of propane autogas is by taking advantage of this alternative fuel tax credit from the federal government,” said Roy Willis, president and CEO of the Propane Education & Research Council.

The IRS has defined forklifts as an “off-highway business motor vehicle,” making them eligible for the alternative motor fuel tax credit in addition to on-road vehicles. The IRS indicated that the end-user of the propane autogas fuel is the entity that should receive the tax credit.

“Propane forklifts are already proven to be a solution for facilities with multiple shifts and round-the-clock operation where down time isn’t an option,” Willis said. “The federal tax credit simply makes propane forklifts more cost effective than they already are.”

The claim for 2015 must be filed by Aug. 8, 2016, according to the IRS procedures.

While they need only to file a few documents with the government to receive the credit, PERC urges all vehicle and forklift operators to consult their own tax advisors first regarding any claims for credits or refunds.

The full guidance published by the IRS on how to file for the tax credit can be found here. To read a recap from the National Propane Gas Association on the recent legislation, visit www.npga.org/i4a/pages/index.cfm?pageid=1901.

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