Form 4136 lets a business claim back the federal excise tax it paid on fuel used in a nontaxable way, such as gasoline used on a farm for farming purposes or in off-highway business equipment. You claim it once a year as an income tax credit, attached to your tax return, with the total carried to Schedule 3 (Form 1040), line 12, or the matching line of a business return. Fuel for personal driving, commuting or ride-share work doesn't qualify.
Everything below comes from the 2025 Form 4136 and its 2025 instructions, as of October 2026.
What counts as a nontaxable use
The instructions list 16 types of use, and you enter the number from that table on the form. The ones most small businesses use are:
| Type | Use |
|---|---|
| 1 | On a farm for farming purposes |
| 2 | Off-highway business use, meaning business use other than in a highway vehicle registered (or required to be registered) for highway use |
| 3 | Export |
| 4 | In a boat engaged in commercial fishing |
| 7 | In a school bus transporting students and employees of schools |
| 13 and 14 | Exclusive use by a nonprofit educational organization, or by a state, political subdivision or the District of Columbia |
The fuel tax credit doesn't apply to gasoline used in vehicles for personal use or commuting, to non-business off-highway use like minibikes, snowmobiles, lawn mowers, chain saws and other yard equipment, or to other vehicles registered for the road. The instructions spell out that driving for ride-sharing services such as Uber or Lyft doesn't qualify either.
2025 claim rates for the common fuels
You generally multiply the rate by the number of gallons. These are the rates printed on the 2025 form, as of October 2026:
| Line | Fuel and use | Rate per gallon |
|---|---|---|
| 1a | Gasoline, off-highway business use | 18.3 cents |
| 1b | Gasoline, on a farm for farming purposes | 18.3 cents |
| 1d | Gasoline, exported | 18.4 cents |
| 3a and 3b | Undyed diesel, nontaxable use or farm use | 24.3 cents |
| 3c | Undyed diesel used in trains | 24.3 cents |
| 3d | Undyed diesel in certain intercity and local buses | 17 cents |
| 3e | Undyed diesel, exported | 24.4 cents |
Line 2 covers aviation gasoline: 15 cents a gallon for use in commercial aviation other than foreign trade, and 19.3 cents for other nontaxable use. For gasoline and aviation gasoline, only the ultimate purchaser can claim this income tax credit on Form 4136; registered vendors and credit card issuers use other forms.
For undyed diesel on line 3, you certify that the fuel didn't contain visible evidence of dye. If any of it did, you check the box and attach an explanation. It's a small line that's easy to skip, and the claim rests on it.
What changed for 2025
- Part I is now required: you have to complete Information About Your Business, including the make, model and type of the equipment that used most of the fuel, to show you qualify.
- Column (d) was added to Part II, lines 1 through 16, for the actual fuel cost from your records.
- Biodiesel and renewable diesel mixture credits expired for sales, uses or removals after 2024, so lines 10a to 10c are reserved.
- Alternative fuel and alternative fuel mixture credits also expired after 2024, and lines 12a to 12i are reserved.
- The sustainable aviation fuel credit can't be claimed on Form 4136 after 2024.
Here's the insight that matters for audits: the IRS uses an average cost per gallon to estimate what you paid, and it expects your column (d) totals to be a relatively small percentage of the gross receipts of the activity using the fuel. Don't send receipts with the return, but keep them, because the IRS may ask for proof of the actual costs later.
Annual credit or a faster refund
Form 4136 is the once-a-year route. Instead of waiting, you may be able to file Form 8849 for a periodic refund, or claim a credit against your excise tax on Form 720. You can't claim on Form 4136 anything you already claimed on Form 8849, Form 8864 or Form 720, Schedule C.
Partnerships, other than electing large partnerships, can't file Form 4136 at all. They attach a statement to each partner's Schedule K-1 showing gallons, the credit per gallon and the nontaxable use, and the partners claim it.
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Filling it in
- Answer line A in Part I. If you didn't own or operate a business with a qualifying use of qualifying fuels, you're not eligible.
- Complete the rest of Part I, including your principal business activity code and the main equipment.
- For each claim, enter the type of use number, the rate, the qualified gallons and the actual fuel cost.
- Multiply rate by gallons for the amount of credit, and add a separate statement if you need more space.
- Add the column (e) amounts on line 17 and carry the total to Schedule 3 or your business return.
Keep records supporting the credit for at least 3 years from the date the return is due or filed, whichever is later. If you deducted the full cost of the fuel, including the excise tax, as a business expense, the instructions say to include the credit in your gross income. Farmers will find the rest of the farm picture in the Schedule F guide.
The verdict
If you run farm machinery, generators, construction equipment or other off-road kit on taxed fuel, Form 4136 is a credit worth claiming, and the 2025 form makes you show the equipment and the cost. Keep fuel logs that separate road use from off-road use, because that split is the whole claim. If your fuel goes into a car you drive for work, commuting or ride-share trips, skip it: that use never qualifies.
Landowners who rent out farmland on a share basis report it on another form, covered in our guide to crop and livestock share rent.
Frequently asked questions
What is Form 4136 used for?
It claims an income tax credit for federal excise tax paid on fuel used in nontaxable ways, such as farming or off-highway business use.
Can I claim Form 4136 for gas I use driving for Uber or Lyft?
No. The instructions say gasoline used for personal use, commuting to work or driving for ride-sharing services doesn't qualify for the fuel tax credit.
What is the Form 4136 rate for gasoline in 2025?
The 2025 form shows 18.3 cents per gallon for off-highway business use and farm use of gasoline.
Where does the Form 4136 credit go on Form 1040?
The total on line 17 goes to Schedule 3 (Form 1040), line 12.
Can a partnership file Form 4136?
No, except electing large partnerships. A partnership reports the fuel details to partners on Schedule K-1 and the partners claim the credit.
