Baker Spindler Holtz CPAs and Advisors

TAX CREDIT FOR ALTERNATIVE FUEL

November 7, 2011

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Baker Spindler Holtz is located in the heart of downtown Grand Rapids. We have been providing quality service to our clients for over three decades.

The IRS allows taxpayers to claim a refundable tax credit for qualified alternative fuel that is used in a motor vehicle. Recently, the IRS issued new guidance in which the term "alternative fuel" includes propane and the term "motor vehicles" includes forklifts. Qualifying taxpayers are allowed a credit of $0.50 per gallon of alternative fuel used through December 31, 2011.

In order to claim the credit, an alternative fuel claimant must be registered by the IRS. To properly register, Form 637, Application for Registration (For Certain Excise Tax Activities) must be completed and filed with the IRS. Upon approval, the applicant will receive a letter of registration along with a corresponding registration number. According to IRS records, it can take upwards of 4-6 weeks to process the registration form.

Due to the complexity of claiming this credit, it is essential that taxpayers maintain proper documentation in order to support their claim. Documentation should include invoices of propane purchased and number of gallons consumed during the period covered by the credit.

Please contact us if you have questions regarding the refundable tax credit for qualified alternative forklift fuel.

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