How to File IRS Form 8911 for the Refueling Credit

Taxpayers who install property for refueling alternative fuel vehicles can lower their tax bill by claiming a credit. IRS Form 8911, the Alternative Fuel Vehicle Refueling Property Credit, is used to calculate and claim this tax benefit. The credit is available to individuals for their homes and businesses for commercial use. This form separates personal use costs from business or investment use costs, as different rules and limits apply to each.

Qualifying for the Alternative Fuel Vehicle Refueling Property Credit

Eligibility for the Alternative Fuel Vehicle Refueling Property Credit extends to individuals and businesses. An individual can claim the credit for property installed at their main home, while businesses, including partnerships and S corporations, can claim it for property used in their operations. The taxpayer must be the original user of the property. The Inflation Reduction Act of 2022 extended this credit through 2032 and updated several provisions.

Qualifying property includes equipment used to store or dispense an alternative fuel or to recharge an electric vehicle. The covered alternative fuels are electricity, hydrogen, natural gas, propane, and certain ethanol or biodiesel mixtures. For property placed in service after December 31, 2022, the definition expanded to include bidirectional charging equipment, which allows electricity to flow both to and from the vehicle, as well as chargers for two- and three-wheeled vehicles.

A requirement for the credit is that the property must be “placed in service” during the tax year for which the credit is claimed. This term means the property is ready and available for its specific use. For example, an electric vehicle charger is considered placed in service on the date it is installed and operational, not the date it was purchased. This date is an important piece of information for completing Form 8911.

The location of the refueling property is a factor in determining eligibility, particularly for property placed in service after 2022. For personal use, the equipment must be installed at the taxpayer’s principal residence. For business use, the property must be located within an “eligible census tract,” which is defined as a low-income community or a non-urban area. The IRS provides online mapping tools to help taxpayers determine if their property’s location qualifies.

Completing Form 8911 Line by Line

To complete Form 8911, you must gather several pieces of information. You will need the total cost of the refueling property, including the equipment and installation labor. You also need the date the property was placed in service and the full address of the installation location. If the property is used for both business and personal purposes, you must calculate the business-use percentage. Business filers must also determine the 11-digit census tract GEOID for the property’s location to confirm it is in an eligible area.

Part I is completed by all filers and begins with the total cost of your qualified property. The form then directs you to calculate the initial credit amount. For property placed in service after 2022, the credit is 30% of the cost, up to a maximum of $1,000 for personal-use property. For depreciable business property, the base credit is 6% of the cost, with a limit of $100,000 per item.

Part II of the form is for business or investment use property. Here, you apply your business-use percentage to the total cost to determine the basis for the business portion of the credit. If a business meets certain prevailing wage and apprenticeship requirements, the credit rate increases from 6% to 30%. The result is the business/investment use part of the credit, which is then treated as a general business credit.

Filing the Form and Claiming the Credit

Once completed, Form 8911 cannot be filed by itself and must be attached to your annual income tax return. For individual taxpayers, this means including it with Form 1040. Business entities submit the form with their respective returns, such as Form 1120 for corporations or Form 1065 for partnerships.

The final credit amount from Form 8911 is transferred to your main tax return. The portion of the credit for personal use is reported on Schedule 3 (Form 1040), Additional Credits and Payments. The business use portion of the credit is carried to Form 3800, General Business Credit, where it is combined with any others you may be claiming.

After filing, you should keep a copy of the completed Form 8911 and all receipts for the purchase and installation of the equipment. You should also retain any documentation used to determine census tract eligibility or business use percentage. These records are necessary to substantiate your claim in the event of an IRS inquiry.