Alcohol Fuel Credit

June 08, 2004


Businesses that sell or use alcohol as a fuel may be eligible for an income tax credit. The alcohol fuel credit consists of a straight alcohol credit, an alcohol mixture credit, and a small ethanol producer credit. Alcohol eligible for the credit includes methanol and ethanol. This includes methanol produced from methane gas formed in waste disposal sites. Credits range from $.3926 to $.60 per gallon, depending on the proof and type of alcohol. IRS Publication 378, Fuel Tax Credits and Refunds, provides information on the three tax credits. A business can take the alcohol fuel credit by completing Form 6478, Credit for Alcohol Used as Fuel, and attaching it to their income tax return. The IRS general web site listed below under "Contact" provides a "Forms and Publications Finder." Enter the form or publication name or number that you are interested in, and click on "GO" to receive the requested form or publication.

Program Overview

Implementing Sector: Federal
Category: Financial Incentive
State: Federal
Incentive Type: Corporate Tax Credit
Web Site:
Administrator: U.S. Internal Revenue Service
Start Date:
Eligible Renewable/Other Technologies:
Incentive Amount: $.40 to $.60 per gallon
Maximum Incentive: $.60/gallon


Name: 26 USC § 40


Name: Public Information - IRS
Organization: U.S. Internal Revenue Service
Address: 1111 Constitution Avenue, N.W.
Washington DC 20224
Phone: (800) 829-1040

This information is sourced from DSIRE; the most comprehensive source of information on incentives and policies that support renewables and energy efficiency in the United States. Established in 1995, DSIRE is operated by the N.C. Clean Energy Technology Center at N.C. State University.