Who May Claim Credit:
Resident and nonresident individuals, fiduciaries of estates and trusts, and C corporations may claim a tax credit on their income tax returns for fuel that was or will be used in unlicensed vehicles for non-highway purposes in the tax period
The Fuel Tax Credit cannot be claimed if the taxpayer has an active Fuel Tax Refund Permit for this tax year and made no claim to a fuel tax refund during this tax year.
This Fuel Tax Credit is not available for casualty losses, transport diversions, pumping credits, off-loading procedures, blending errors, idle time, power take-offs, reefer units, exports by distributors, or excess tax paid on gasohol/E85. Dyed diesel fuel is always sold free of Iowa fuel tax. No Fuel Tax Credit may be claimed for dyed diesel fuel.
All undyed special fuel used in watercrafts is eligible for the Fuel Tax Credit; however, gasoline used in a watercraft does not qualify for the credit unless the watercraft was used by a commercial fisher licensed and operating under an owner’s certificate for commercial fishing gear issued pursuant to Iowa Code section 482. 7.
The income tax credit may be claimed by members of a partnership, LLC, or S corporation. If a member is claiming an income tax credit for fuel purchased by a partnership or S corporation, each member’s share of the credit is found in Part III of the IA Schedule K-1.
Fuel tax rate:
Gasoline: .21 per gallon
Gasohol: .19 per gallon
E85: .19 per gallon
Undyed Diesel Fuel: .22.5 per gallon
Special Fuel (LPG): .20 per gallon