Why is it Important
The welfare of the community relies on the effective provision of the government. In this case, the government awards a non refundable tax credit to taxpayers who use alternative fuel credit that are either sold commercially or by the taxpayer’s vehicle’s business. The establishment such as fuel stations also follows the set qualifications from the government. A consumer who decides to go green and chooses to help the environment will be credited for their act. This is one of the best initiatives about the American Recovery and Reinvestment Act of 2009. It offers fund to lower the dependence to harmful energy sources and decrease air pollution. This works hand in hand, the beauty of being able make a sustainable living by helping to improve the quality of life. This in return is also appreciated by giving credits for those who comply in using alternative fuel credit.
Eligibility to claim credit
According to the Federal and State Incentives and laws, a tax credit in the amount of $0.50 per gallon is available for the following alternative fuel credit such as compressed natural gas, LPG, liquid fuel from coal, P-series fuels, hydrogen, solar power, electricity, and biodiesel. Eligible parties should be registered with the Internal Revenue Service (IRS). In order to claim the credit one must be liable for reporting and paying the federal tax excise on the sale. The state and local government distributes qualified fuel from the refilling stations for use in vehicles qualified for the incentive. It must be dispensed into a fuel tank of a motor vehicle. This must be considered first as a credit and any amount in excess to this fuel tax liability may be a direct payment from the IRS.
Steps on how to avail credit
To avail the alternative fuel credit one must complete a form 8910 tax credit. You can either download the forms in the internet or you can personally visit the Department of the Treasury. You may also want to view more information about the qualifications through the IRS. Additional requirements must be followed in order to qualify for this alternative fuel credit: The entity must state the refueling property in service during the tax year and if the property is not used mainly outside the United States. If the property is not a business, it must be installed within or used in the main house.
The Value of Tax Credit
The amount of tax credit is up to 30% less from cars and machineries that does not exceed $30,000 worth of value and 50% if it does not exceed $50,000 worth of value. The tax credit also goes to fuel refilling station owners who may want to benefit from this. They also follow the guideline set by the government. Since income tax credits from 2010 and 2011 is different then it may be the same case for this year. There are private companies who offer consultations in energy efficiency but not necessarily in tax credits. But this may also boost your knowledge on how to weigh your options and is definitely a big in help in computing the tax credit due to you and confirms your eligibility.
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