Key Updates from Inflation Reduction Act Passed
The President signed the Inflation Reduction Act of 2022 (H.R. 5376) today, which extends various fuel-related credits, reinstates the Hazardous Substance Superfund Financing Rate, and creates new credits.
Credit Extensions
Expiration dates have changed as follows:
Alternative Fuel Credit: 12/31/2021 → 12/31/2024
Alternative Fuel Mixture Credit: 12/31/2021 → 12/31/2024
Biodiesel Mixture Credit: 12/31/2022 → 12/31/2024
Reinstated Hazardous Substance Superfund Financing Rate – Effective 1/1/2023
Effective January 1, 2023, the Hazardous Substance Superfund Financing Rate will be reinstated at 16.4 cents per barrel. There will be an annual cost-of-living adjustment.
This reinstated tax applies to the same products (crude oil and petroleum products) and taxpayers as the current Federal Oil Spill Tax and is expected to be paid on the same forms.
New Credits
Sustainable Aviation Fuel Credit – Effective 1/1/2023 through 12/31/2024
The credit starts at $1.25 per gallon of sustainable aviation fuel in a qualified mixture upon sale or use of such mixture and will be available as an income tax credit or excise tax credit.
Registration will be required under IRC § 4101, the same section requiring registration on Form 637.
Clean Fuel Production Credit – Effective 1/1/2025 through 12/31/2027
The credit starts at either $0.20 or $1.00 per gallon of eligible transportation fuel (other than sustainable aviation fuel) that is produced and sold by the taxpayer and will only be available as an income tax credit.
The credit starts at either $0.35 or $1.75 per gallon of eligible transportation fuel that is sustainable aviation fuel.
Registration will be required under IRC § 4101.
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