Federal Tax Incentive Update

On December 17, 2010, President Obama signed H.R. 4853, the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (Public Law No: 111-312). This Act extends and reinstates several alternative fuel tax credits through December 31, 2011. See the Federal Incentives & Laws Web page for additional information.

Extended tax credits include:
• Qualified Alternative Fuel Infrastructure Tax Credit: http://www.afdc.energy.gov/afdc/laws/law/US/351 
• Volumetric Ethanol Excise Tax Credit (VEETC): http://www.afdc.energy.gov/afdc/laws/law/US/399 
• Small Ethanol Producer Tax Credit: http://www.afdc.energy.gov/afdc/laws/law/US/352
• Small Agri-Biodiesel Producer Tax Credit: http://www.afdc.energy.gov/afdc/laws/law/US/342

The Act also reinstates several tax credits that expired after December 31, 2009:
• Alternative Fuel Excise Tax Credit: http://www.afdc.energy.gov/afdc/laws/law/US/319 
• Alternative Fuel Mixture Excise Tax Credit: http://www.afdc.energy.gov/afdc/laws/law/US/417 
• Biodiesel Mixture Excise Tax Credit: http://www.afdc.energy.gov/afdc/laws/law/US/395 
• Biodiesel Income Tax Credit: http://www.afdc.energy.gov/afdc/laws/law/US/396 

Special Rule for 2010 Excise Tax Credit Claims:
The Alternative Fuel, Alternative Fuel Mixture, and Biodiesel Mixture Excise Tax Credits were reinstated retroactively, meaning taxpayers may submit a one-time claim for qualified fuel sold or used during the 2010 tax year. The U.S. Internal Revenue Service (IRS) has issued special guidance to allow a 180-day period for the submission of these claims. Please refer to the IRS Notice 2011-10 for additional information (http://www.irs.gov/pub/irs-drop/n-11-10.pdf). 

Expired Incentives:
Two vehicle purchase incentives expired after December 31, 2010, and were not extended:
• Qualified Alternative Fuel Motor Vehicle Tax Credit
• Light-Duty Hybrid Electric Vehicle and Advanced Lean Burn Vehicle Tax Credit

The descriptions of these expired tax credits, including the expiration dates, will remain on the Federal Incentives & Laws Web site until the federal tax filing deadline.

Information provided by the Alabama Clean Fuels Coalition