41-036: 2024 IA 4136 Computation of Iowa Fuel Tax Credit 41-036 (2024)
Iowa · Iowa DOR · Used for tax years 2024
The 2024 IA 4136 calculates the Iowa Fuel Tax Credit by fuel type using gallons purchased, highway use, Iowa fuel tax paid, and any sales tax owed. It also reports fuel tax credits received from pass-through entities.
Who files this form
Use the 2024 IA 4136 to claim an Iowa income tax credit for fuel purchased during your tax period for use in unlicensed vehicles for non-highway purposes. Iowa fuel tax must have been paid on the fuel.
Partnerships, LLCs, S corporations, estates, and trusts that calculate this credit must file IA 4136 and federal Form 4136 with their returns. Credits allocated to members must follow each member’s share of the entity’s earnings. Special allocations are not permitted.
Members and beneficiaries claiming an allocated credit must report it on line 8 of IA 4136 and include the form with their returns.
What you'll need
Have these records and forms ready:
- Fuel invoices issued in the name of the taxpayer or entity claiming the credit. Check that Iowa fuel tax was paid.
- Invoice dates, fuel types and blends, whole gallons purchased, fuel costs, and whole gallons used on highways.
- Your legal name, doing-business-as name, FEIN or SSN, and tax period ending date.
- For a pass-through credit, the entity’s name, FEIN, and credit amount.
- Federal Form 4136, which must be included with IA 4136 and your Iowa return.
Keep fuel invoices for three years after filing your return.
How to file
- Enter your identifying information and check the applicable “Fuel used for” boxes.
- On lines 1 through 6, use the row for the fuel type and invoice date. Subtract highway gallons from invoice gallons to find claimed gallons.
- Multiply claimed gallons by the printed fuel tax rate. Subtract any sales tax owed to find the credit.
- Add the credit columns from lines 1 through 6 on line 7. Enter a received pass-through credit on line 8, and add lines 7 and 8 on line 9. File a separate IA 4136 for each pass-through credit received.
- Include IA 4136 and federal Form 4136 with your IA 1040, IA 1041, IA 1120, IA 1120S, or IA 1065.
Where to report the credit
- IA 1040: Report line 9 on Step 6, line 23.
- IA 1120: Report line 9 on Schedule C1, line 1.
- IA 1041: Report amounts claimed by the estate or trust on line 42. Report amounts allocated to beneficiaries on IA 1041 Schedule K-1 using tax credit code 4136, listing each claim separately.
- IA 1065 and IA 1120S: Report earned and received credits separately on Schedule B and each member’s allocated share on Schedule K-1, using tax credit code 4136. List each claim separately.
E-file restriction for line 3c
IA 1120, IA 1065, IA 1120S, or IA 1041 filers subject to Iowa’s e-file mandate cannot e-file this form through the IRS Modernized e-file program when requesting a credit for gallons on line 3c. They may request a good cause exception for IA 1120, IA 1065, IA 1120S, IA 1041, and IA PTE-C by submitting Form 78-641. Select “other” and write “IA 4136, line 3c” in the space provided.
The supplied text does not give a mailing address.
Common mistakes
- Entering a canceled fuel tax refund permit number. Enter your FEIN or SSN instead.
- Leaving “Fuel used for” blank. This area must be completed.
- Claiming fuel without checking invoices. Verify that Iowa fuel tax was paid and that invoices are in the claimant’s name.
- Claiming dyed diesel. Dyed diesel is sold free of Iowa fuel tax and does not qualify.
- Failing to subtract sales tax owed. The credit must be net of sales tax.
- Combining separate pass-through claims. File a separate IA 4136 for each pass-through credit received. Report credits you earned and credits passed through to you separately.
Questions people ask
Can I claim both a fuel tax refund and this credit?
Generally, if you filed a fuel tax refund claim during the tax year, you cannot also claim this credit. Claiming the credit makes your refund permit invalid. However, refunds 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 may be claimed alongside the credit. Those uses or losses do not qualify for the credit itself.
Does fuel used in a boat qualify?
All undyed special fuel used in watercraft qualifies. Gasoline qualifies only if the watercraft was used by a commercial fisher licensed and operating under an owner’s certificate for commercial fishing gear issued under Iowa Code section 482.7.
How do I calculate sales tax on claimed fuel?
For each row, subtract the applicable Iowa fuel tax per gallon from the average purchase cost per gallon. Multiply by claimed gallons, then by 6%. Sales tax is owed on claimed fuel unless it was used in an exempt activity, such as farming or processing.
What if I earned a credit and also received one from a pass-through entity?
Calculate your earned credit on lines 1 through 7 and enter the pass-through credit on line 8. Report each credit separately.