Biofuel Commercial Production and Commercial Use Credit: Biofuel Commercial Production and Commercial Use Credit (2025)

Maine · Maine Revenue Services · Used for tax years 2025

This worksheet calculates Maine’s Biofuel Commercial Production and Commercial Use Tax Credit for tax year 2025. It reports income from certified biofuel production, eligible gallons, prior-year credit carryforwards, and the credit amount claimed with your Maine income tax return

Who files this form

Use this worksheet to claim the credit for producing certified biofuel in Maine. For the 2025 credit, the biofuel must have been produced in tax year 2025, meet state and federal regulatory requirements, and be certified by the Commissioner of the Maine Department of Environmental Protection (DEP).

The credit is $0.05 per eligible gallon and applies against tax on income from producing that biofuel.

Partners, members, shareholders, beneficiaries, and other owners of pass-through entities may claim a credit in proportion to their ownership interests.

What you'll need

  • Completed credit worksheet, including your taxpayer name and EIN or SSN.
  • A copy of the DEP certification showing the quantity of eligible biofuel produced. Submit it with the income tax return claiming the credit.
  • Your applicable Maine income tax return: Form 1040ME, 1040C-ME, 1041ME, or 1120ME. You will use its taxable income and gross tax liability figures to calculate the credit limit.
  • Any eligible unused credit amount from prior years to enter on line 7.
  • For pass-through entity owners: the entity's name, EIN or SSN, your ownership percentage for the tax year, and a copy of the federal Schedule K-1 issued to you by the entity.

Maine Revenue Services may request additional information supporting the credit before processing the return.

How to file

Enclose the completed worksheet with Form 1040ME, Form 1040C-ME, Form 1041ME, or Form 1120ME, whichever applies. Include a copy of the DEP certification and, if claiming through a pass-through entity, your federal Schedule K-1.

To complete the calculation:

  1. Enter Maine taxable income from the sale of certified biofuels on line 1. Pass-through owners enter only the applicable income included in their Maine taxable income.
  2. On line 2, divide the gross tax liability on your return by its taxable income. Multiply line 1 by line 2 for line 3.
  3. Enter the DEP-certified gallons on line 4. Pass-through owners multiply the certified gallons by their ownership percentage.
  4. Multiply line 4 by the $0.05 rate on line 5 to get line 6. Add eligible carryforward credit from line 7 to get line 8.
  5. Enter the smaller of line 3 or line 8 on line 9.

Report line 9 on the applicable return schedule:

  • Form 1040ME: Schedule A, Other Tax Credits Worksheet (for Lines 8 and 20), line 14.
  • Form 1040C-ME: Schedule A, line 14.
  • Form 1041ME: Schedule A, line 18.
  • Form 1120ME: Schedule C, line 1l.

Common mistakes

  • Leaving out required attachments. A copy of the DEP certification must accompany the return. Pass-through owners must also attach their federal Schedule K-1.
  • Claiming the entire blend as biofuel. If certified biofuel is blended with petroleum or other non-biofuels, only the biofuel portion qualifies.
  • Claiming more than your ownership share. Pass-through owners receive a proportional credit and must adjust the gallons on line 4 by their ownership percentage.
  • Reducing tax below zero. The credit, including carryovers, cannot reduce the applicable tax liability below zero.
  • Using expired carryforwards. Unused credit may be carried forward only for up to 10 taxable years following the year it was generated.

Questions people ask

How much is the credit?

The credit is $0.05 per eligible gallon of certified biofuel. The amount claimed for the year is limited to the tax liability related to the credit, calculated on line 3.

How do I get biofuel certification?

Apply to DEP. For certification requirements and applications, contact the Bureau of Air Quality, Mobile Sources Section, at (207) 287-6102. You can also visit maine.gov/dep/air, select Programs, then Mobile Sources.

Can I use unused credit in a later year?

Yes. Unused credit may be carried forward for up to 10 taxable years following the year it was generated. It may be applied against tax liability on income from producing biofuel.

What counts as biofuel?

The worksheet defines biofuel as commercially produced liquid or gas derived from agricultural crops or residues, or forest products or by-products, rather than petroleum or other fossil carbon sources. It must be used to propel motor vehicles or otherwise substitute for liquid or gaseous fuels. Examples include ethanol, biodiesel, and methane from biomass.

Official sources

All versions of Biofuel Commercial Production and Commercial Use Credit