41-150: IA 135 E85 Gasoline Promotion Tax Credit 41-150 (2025)

Who files this form

Use the 2025 IA 135 to claim the Iowa E85 Gasoline Promotion Tax Credit if you are a retail gasoline dealer operating fuel pumps at an Iowa retail fuel site and sell qualifying E85 gasoline. Tank wagons count as retail fuel sites.

The instructions describe qualifying E85 as ethanol-blended gasoline formulated with a minimum ethanol percentage between 68% and 83% by volume.

Taxpayers who receive this credit from a partnership, LLC, S corporation, estate, or trust must also use IA 135. File a separate IA 135 for each pass-through E85 credit received.

What you'll need

Have the following information ready:

• Your name, Social Security Number (SSN) or Federal Employer Identification Number (FEIN), and tax period ending date.
• The total gallons of E85 gasoline sold at retail in Iowa during the tax year.
• Any E85 credit received from a pass-through entity, plus that entity’s name and FEIN.

Include IA 135 and the IA 148 Iowa Tax Credits Schedule with an IA 1040, IA 1041, or IA 1120 return. For an IA 1065 or IA 1120S return, include IA 135 and report the credit on the applicable Schedule B and Schedule K-1.

How to file

1. Enter your identifying information and tax period ending date. Add pass-through entity information if applicable.
2. On line 1, enter the total gallons of E85 gasoline sold at retail in Iowa during the tax year.
3. Multiply line 1 by $0.16 and enter the credit on line 2.
4. Enter any E85 credit received from a pass-through entity on line 3. Use a separate IA 135 for each pass-through credit received.
5. Include IA 135 with your Iowa tax return.

Where to report the credit:

• IA 1040, IA 1120, or IA 1041 credits claimed at the entity level: Report lines 2 and 3 on IA 148, Part II, using tax credit code 55. List each claim separately. For line 3 credits, also provide the pass-through entity information in IA 148, Part IV.
• IA 1041 credits allocated to beneficiaries: Report each beneficiary’s allocated share on IA 1041 Schedule K-1 using code 55. Instruct beneficiaries to report the credit on line 3 of their own IA 135 and include it with their return.
• IA 1065 or IA 1120S: Report credits earned and received on the applicable Schedule B, and each member’s allocated share on Schedule K-1, using code 55. List each claim separately. Instruct members to report their allocated credit on line 3 of IA 135 and include it with their return.

Common mistakes

• Using special allocations: These are not permitted. A pass-through entity must allocate the credit according to each member’s share of the entity’s total earnings.
• Combining pass-through credits on one IA 135: File a separate form for each pass-through E85 credit received and provide the required entity information.
• Combining separate claims on reporting schedules: List each credit earned or received separately, as instructed.
• Leaving out required attachments: Include IA 135 with your return. Include IA 148 as well when filing IA 1040, IA 1041, or IA 1120.

Questions people ask

How much is the 2025 E85 credit?

The credit is $0.16 per gallon of E85 gasoline sold at retail in Iowa during the tax year. Multiply line 1 by $0.16 to calculate line 2.

What happens if the credit is more than my tax liability?

The excess can be refunded or credited to your tax liability for the following year.

Do tank wagons qualify as retail fuel sites?

Yes. The instructions state that tank wagons are considered retail fuel sites.

Where do I enter a credit received from a pass-through entity?

Enter it on line 3 of IA 135. File a separate IA 135 for each pass-through E85 credit received and provide the entity’s required information.

Which tax credit code should I use?

Use tax credit code 55 on the applicable IA 148, Schedule B, or Schedule K-1, as directed in the reporting instructions.

Official sources

• https://revenue.iowa.gov/media/4410/download?inline