The Internal Revenue Services (IRS) recently issued Notice 2022-39 (“the Notice”). The Notice provides guidance for making a one-time claim for the credit and payment allowable for alternative fuels sold or used during the first, second, and third quarters of 2022. In addition, the Notice provides instructions for how a taxpayer’s liability for the excise tax imposed by Internal Revenue Code (IRC) § 4081 may be reduced by claiming the alternative fuel mixture credit allowable under IRC § 6426(e) for the first and second calendar quarters of 2022.
Background
Alternative Fuel Credit – IRC § 6426(a) and (d) allow a $0.50 per gallon credit against the excise tax liability under IRC § 4041 if a person sells or uses alternative fuel as a fuel in a motor vehicle or motorboat or in aviation. Any excess credit under § 6426(d) may be claimed as a payment under § 6427(e) or as a refundable income tax credit under IRC § 34.
Alternative Fuel Mixture Credit – IRC § 6426(a) and (e) allow a $0.50 per gallon credit against the excise tax liability under § 4081 for blenders of alternative fuel mixtures. A person’s § 6426(e) alternative fuel mixture credit claim for any calendar quarter may not exceed the person’s excise tax liability under § 4081 incurred in the calendar quarter for which the credit is being claimed.
The Infrastructure Investment and Jobs Act has reinstated these credits and payment for sales and use through December 31, 2024. Under 13201(g) of the Inflation Reduction Act, the Secretary is directed to issue guidance, providing a 180-day period for a one-time submission of claims under § 6426(d) and § 6427(e) for the January 1, 2022 through September 30, 2022 period.
Our Ryan experts have been monitoring this Notice. Based on previous experience with the Alternative Fuel Credit and Alternative Fuel Mixture Credit, we are well equipped to assist you with the reinstatement of these credits as well as the one-time filing process.
Contact your Ryan expert to understand how IRS Notice 2022-39 will affect you.
TECHNICAL INFORMATION CONTACTS:
David Pustejovsky
Principal
Ryan
972.934.0022
david.pustejovsky@ryan.com
Tyler Jones
Manager
Ryan
913.336.2005
tyler.jones@ryan.com
The material presented in this communication is intended to provide general information only and should solely be seen as broad guidance and not directed to the particular facts or circumstances of any individual who may read this publication. No liability is accepted for acts or omissions taken in reliance upon the content of this piece. Before taking (or not taking) any action, readers should seek professional advice specific to their situation from Ryan, LLC or other tax professionals. For additional information about this topic, please contact us at info@ryan.com.