N-163: Fuel Tax Credit for Commercial Fishers – Individual (Revision 2024)

Who files this form

Use Form N-163 to figure and claim the fuel tax credit for commercial fishers. A principal operator of a commercial fishing vessel who files an income tax return may qualify if they purchase and actually use the fuel to operate the vessel for commercial purposes.

You cannot claim this credit for:

• Fuel used in charter fishing boats or similar operations where income comes from fees or sources other than commercial fishing.
• Fuel used in a fishing activity not engaged in for profit.
• Alternative fuels.

The form also allows you to claim a share of the credit received from another entity.

What you'll need

To claim the credit, complete and attach these to your Hawaii income tax return:

• Form N-163.
• Schedule CR, if required for your return.
• A copy of the applicable Schedule K-1 if claiming a share of the credit from a partnership, S corporation, estate, or trust.

To complete Form N-163, you will need your name as shown on your return and your SSN or FEIN. If claiming credit for fuel you purchased and used, you will also need the number of diesel gallons and the gasoline gallons for each county listed in Part II.

For a credit received from another entity, provide its name and federal employer identification number. Line 4 uses Hawaii Schedule K-1 amounts for shareholders, partners, and beneficiaries, or federal Form 1099-PATR for patrons.

How to file

Complete Form N-163 and attach it to your applicable Hawaii income tax return. The form lists Forms N-11, N-15, N-20, N-30, N-35, N-40, and N-70NP.

For individual filers using Form N-11 or N-15:

1. Enter diesel gallons on Part I, line 1, and multiply by $0.01 on line 2.
2. Calculate the gasoline credit by county in Part II, then enter the total on Part I, line 3.
3. Enter any credit received from another entity on line 4 and attach the applicable Schedule K-1.
4. Add lines 2, 3, and 4 on line 5. Enter the total, rounded to the nearest dollar, on the appropriate line of Schedule CR.

If you are only claiming a share of the credit from a partnership, S corporation, estate, or trust, skip lines 1 through 3 and begin on line 4.

The supplied text does not give a mailing address or e-filing directions.

Common mistakes

• Completing fuel calculations when claiming only a distributed credit. The form says to skip lines 1 through 3 and start on line 4 if you are only claiming a share from a partnership, S corporation, estate, or trust.
• Claiming credit for excluded uses or fuels. The credit is not available for the charter operations described in the instructions, fishing activities not engaged in for profit, or alternative fuels.
• Claiming extra credit by filing separately. If spouses file separate returns when they could have filed jointly, they may claim only the credit they would have been entitled to on a joint return.

Questions people ask

Can I receive a refund if the credit is more than my income tax?

Yes. If the properly claimed and allowed credit exceeds the principal operator's income tax due, the excess will be refunded to the principal operator.

What rates does the form use to calculate the credit?

The diesel rate is $0.01 per gallon. The gasoline rates in Part II are $0.325 for Honolulu, $0.400 for Maui, $0.390 for Hawaii, and $0.330 for Kauai. The credit is limited to the specified fuel taxes paid by the principal operator for operating the vessel during the taxable year.

Is there another option for alternative fuels?

Alternative fuels do not qualify for this credit. However, the instructions say you may obtain a refund of fuel taxes paid by filing Form M-36, Combined Claim for Refund of Fuel Taxes.

Do the references to spouses include civil union partners?

Yes. The form says references to “married” and “spouse” also refer to “in a civil union” and “civil union partner.”

Official sources

• https://files.hawaii.gov/tax/forms/current/n163_i.pdf