How to Claim Tax Credit for Propane Forklift Operators
In 2006 Congress passed a bill that allows companies to receive a fuel tax credit based on the amount of propane they used in their forklifts. Businesses that want to claim a fuel tax credit for the amount of propane used from October 10, 2006, through December 31, 2009, to operate forklifts will need to apply for an excise tax registration with the Internal Revenue Service. The IRS website is the best place to get the information you need to claim the credit.
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Instructions
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Navigate to the IRS website to find the necessary forms and instructions that will help you claim the fuel tax credit. You are looking for Form 637.
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Complete parts I through III of Form 637. When completing the Form 637, make sure to enter the code "AL" in Part II as the activity letter. This is the code for the use of alternative fuel in a motor vehicle.
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Sign and send the completed Form 637 to the IRS for approval. The address is:
Department of the Treasury
Internal Revenue Service
Cincinnati, OH 45999It may take up to three months before you receive a letter of registration from the IRS.
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Once you receive your letter of registration from the IRS, you can continue the process to claim the credit.
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Determine the amount of gallons of propane used in your company's forklifts from October 10, 2006, through December 31, 2006, and for the full years 2007, 2008 and 2009, if applicable.
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Prepare amended tax returns for 2006 through 2009 or for all years that apply.
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Complete a separate Form 4136 (Credit for Federal Tax Paid on Fuels) for all years that are being amended. Form 4136 is normally completed to claim a fuel tax credit for federal tax paid on nontaxable fuels. Starting in 2006, the form was updated to allow business to claim a credit for the use of propane in forklifts. The amount of gallons used each year in forklifts is entered in Part 12, Line B of Form 4136. You must also enter your registration number in Part 12.
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Attach the completed Form 4136 to your amended returns.
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Sign your amended returns and send them to the IRS at the same address your original returns were sent to.
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Tips & Warnings
Make sure to keep supporting documentation for the amount of gallons of propane used in forklifts in case of an IRS audit.
References
Resources
- Photo Credit forklift image by Michael Cornelius from Fotolia.com
