The IRS announced last week that it will not begin accepting e-filed tax year 2025 returns that include Form 4136, Credit for Federal Tax Paid on Fuels, until February 22, 2026. IRS encourages impacted taxpayers to wait until that date to file to avoid delays or rejection.
This announcement is the latest in a series of attempts to crack down on fraudulent fuel tax credit claims promoted on social media. False fuel tax credit claims were added to the IRS Dirty Dozen list in 2024. The IRS 2025 Dirty Dozen list explains the problem this way:
False Fuel Tax Credit claims: A major concern during the past year involved taxpayers who were misled into believing they were eligible for the Fuel Tax Credit. The credit is meant for off-highway business and farming use and is not available to most taxpayers. However, unscrupulous tax return preparers and promoters, including people on social media, continue enticing taxpayers into inflating their refunds by erroneously claiming the credit. The IRS has seen an increase in the promotion of filing certain refundable credits using Form 4136, Credit for Federal Tax Paid on Fuels. The IRS urges people to get more information and ensure they are properly claiming this credit.
While this should not alarm those legitimately claiming the credit (including most farmers), it does mean they must jump through a few extra hoops to claim it.
Last filing season, those who claimed the credit were required to fill out a Fuel Tax Credit Statement and attach it to their Form 4136. This year, Part I of Form 4136 includes the additional screening questions.
These changes are fraud-prevention measures. The actual law under which farmers claim the credit did not change. Owners, operators, and tenants of farms may be eligible to claim a credit or refund of excise taxes on fuel used in the trade or business of farming when used on a farm in the United States for farming purposes. The table below (from IRS 2025 Publication 225) provides an at-a-glance look at the details of excise tax credits and refunds for which farmers may qualify.
While requests for credits are reported on Form 4136, requests for refunds are reported on Form 8849, Schedule 1. For those with quarterly claims exceeding $750, Form 8849, Schedule 1, may be filed throughout the year for a faster refund. Otherwise, the credit is claimed once a year on Form 4136 when the individual income tax return is filed. Of course, refunds reported on Form 8849 cannot be reported on Form 4136.
Farmers must also remember to include any credit or refund of excise taxes on fuels in gross income if the cost of the fuel (including the excise tax) was claimed as an expense deduction. Pass through entities must provide fuel tax credit information with the K-1. The credit is not claimed at the entity level.
For additional information on this fuel excise tax credits and refunds, see Chapter 14 of Publication 225 and the Instructions to Form 4136 and Form 8849, Schedule 1.