An Iowa Biodiesel Blended Fuel Tax Credit is available to retail dealers of diesel who operate fuel pumps at an Iowa retail fuel site. Tank wagons are considered retail fuel sites. To qualify for the tax credit, retail dealers must sell biodiesel blended fuel with a minimum percentage of 11 by volume of biodiesel.
Eligibility and Restrictions:
- Available to retailers of diesel fuel who sells B5 or higher blends of biodiesel during the year at a retail motor fuel site
- The amount paid per gallon is based on the percentage of biodiesel blended fuel and may change from year to year.
- 2025 credits = 5 cents per gallon with 11%-19% biodiesel
7 cents per gallon with 20-29% biodiesel and
10 cents per gallon for biodiesel fuel blended at 30% or higher
- Fuel must be used in unlicensed vehicles for non-highway purposes. The credit is not available if a fuel tax refund claim was filed during the same tax year, as claiming both would invalidate the refund permit.
- The credit does not apply to casualty losses, transport diversions, idle time, pumping credits, off-loading procedures, reefer units, blending errors, power take-offs, ready mix, solid waste, export by distributors, or overpaid tax on blended fuel. Refunds may still be claimed for these reasons separately.
- If the tax credit is earned by a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the pro rata share of the income of the entity
Source:
Form IA 8864 - Iowa Biodiesel Blended Fuel Tax Credit
Form IA 1040- Iowa Income Tax Return
Disclaimer: Always verify details with the official Federal or State Department of Revenue Forms and Instructions. This information is for general guidance and may not apply to all individual circumstances. For complex tax situations, consult a CPA or tax attorney.