Form 8849 Schedule 1 – Nontaxable Use of Fuels
What is Form 8849 Schedule 1?
- Form 8849, Schedule 1, issued by the Department of the Treasury's Internal Revenue Service (IRS), facilitates claims for a refund related to the nontaxable use of fuels. This form is designed for individuals or entities that have purchased specific fuels for designated purposes and are now seeking a refund for the taxes paid on these fuels. The fuels covered by this form range from gasoline and diesel to alternative fuels like liquefied petroleum gas and compressed natural gas.
- It involves understanding various sections, such as the nontaxable use of gasoline, aviation gasoline, undyed diesel fuel, undyed kerosene, kerosene used in aviation, alternative fuel, diesel-water fuel emulsion, and exported dyed fuels and gasoline blendstocks.
What are the main objectives of
Form 8849 Schedule 1?
- The primary purpose of Form 8849, Schedule 1, is to facilitate the claiming of refunds for nontaxable uses of fuel. The data required includes detailed information about the types of fuel, their usage, and corresponding tax rates.
- By accurately completing Schedule 1 and attaching it to Form 8849, claimants can seek refunds or credits for Federal Excise Taxes previously paid on fuel.
5 Benefits of Form 8849 Schedule 1
Who is Eligible to File Form 8849 Schedule 1?
Several entities and individuals are eligible to file Form 8849, Schedule 1, including:
Purchasers of Fuel
Truckers
Operators
Entities
Organizations
Fire Departments
Specific eligibility criteria apply to each category, ensuring that those who have paid federal excise taxes on specified fuels used in their operations can benefit from Schedule 1.
Form 8849 Schedule 1
Specific Instructions
To file a claim using Schedule 1, certain requirements must be met:
- The claimed amount must be at least $750.
- The claim must be filed in the first quarter following the earliest income tax quarter of the claimant included in the claim.
- Only one claim may be filed for a quarter.
Claimants need to add all amounts in column (d) and enter the total refund in the designated box at the top of the schedule.
The fuel claimed must have been used for specific types of use, as detailed in the instructions for lines 1 through 7. The Type of Use Table in the Form 8849 instructions provides a comprehensive list of nontaxable uses.
Taxable Fuel
For claims related to exported taxable fuel, claimants must include proof of exportation with their records. This includes documentation such as an export bill of lading, a certificate of exportation, or a statement from the foreign consignee.
How to File Form 8849 Schedule 1 Manually?
Source : IRS Form 8849 Schedule 1
Let's explore each line of Schedule 1, highlighting the allowable uses and
specific information required for accurate reporting.
- For 1a: Gasoline used for types of use 2, 4, 5, 7, 11, 12, 13, 14, or 15, excluding personal use or use in a motorboat.
- For 1b: Gasoline exported during the period of claim (type of use 3).
Clearly distinguish between different types of aviation gasoline uses. Provide proof of exportation if claiming for exported taxable fuel.
- For 2b: Aviation gasoline used for types of use 2, 9, 10, 11, 13, 14, 15, or 16.
- For 2c: Aviation gasoline exported during the period of claim (type of use 3).
- For 2d: Additional claim for aviation gasoline used for type of use 9.
Certify that diesel fuel claimed on 3a did not contain visible evidence of dye. Provide a detailed explanation if any part of the claimed diesel fuel contained visible evidence of dye.
- For 3a: Diesel fuel used for types of use 2, 6, 7, 8, 11, 12, 13, 14, or 15.
- For 3e: Diesel fuel exported during the period of claim (type of use 3).
Certify that the kerosene claimed on 4a did not contain visible evidence of dye. Understand that claims for kerosene sales from a blocked pump are not allowed on line 4.
- For 4a: Kerosene is used for types of use 2, 6, 7, 8, 11, 12, 13, 14, or 15.
- For 4d: Kerosene exported during the period of claim (type of use 3).
Certify that the right to make the claim has not been waived. Attach a statement explaining the claim for relief provided by the tax holiday for kerosene used in commercial aviation from March 28, 2020, through December 31, 2020.
- For 5a and 5b: kerosene is used in commercial aviation (other than foreign trade).
- For 5c, 5d, and 5e: Kerosene used in noncommercial aviation (except for nonexempt, noncommercial aviation, and exclusive use by a state, political subdivision of a state, or the District of Columbia).
Apply the correct credit rate based on the type of alternative fuel used. Be aware of the reduced credit rate for use on certain intercity and local buses (type of use 5).
- Various alternative fuels are used for types of use 1, 2, 4, 5, 6, 7, 11, 13, 14, or 15.
Certify that the diesel-water fuel emulsion claimed on 7a did not contain visible evidence of dye. Understand the reduced credit rate for use on certain intercity and local buses (type of use 5).
- For 7a: Diesel-water fuel emulsion used for types of use 1, 2, 5, 6, 7, 8, 11, 12, 13, 14, or 15.
- For 7b: Diesel-water fuel emulsion exported during the period of claim (type of use 3).
Be cautious about the claim rates for exported dyed fuels and gasoline blend stocks.
Distinguish between exported dyed diesel fuel and exported gasoline blendstocks taxed at different rates.
- Dyed diesel fuel, dyed kerosene, and gasoline blendstocks were exported during the period of the claim.
Form 8849 Schedule 1 Deadline
- The filing is allowed for only one claim per quarter. Hence, the form must be filed in the first quarter that follows the last quarter of any claim.
- Say suppose the amount in any month from April through June and July through September must be filed between the dates 1st October and 31st December.
- Understand the specific rules and requirements for each type of use to ensure accurate reporting and eligibility for refunds.
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