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Summary of Alternative Fuel Tax Credit Extensions in the Bipartisan Budget Act of 2018 (H.R. 1892)

On Friday, February 9, 2018, President Trump signed the Bipartisan Budget Act of 2018 (H.R. 1892). Division D of the Act retroactively extends many tax credits. The bill gives a one-year reprieve to provisions that expired at the end of 2016. They still have expired, but the expiration date is now at the end of 2017. Consequently, these benefits can be claimed on 2017 income tax returns.

There are several Bipartisan Budget Act provisions with implications for Clean Cities portfolio items:

  • Alternative Fuel Infrastructure Tax Credit. Section 40404 extends the tax credit for alternative fuel infrastructure through December 31, 2017. Fueling equipment for natural gas, propane, liquefied hydrogen, electricity, E85, and biodiesel are eligible for a tax credit of 30%, up to $30,000. Residential fueling equipment may receive a tax credit up to $1,000.
  • Alternative Fuel Excise Tax Credit. Section 40415 extends the $0.50 per gallon tax credit for alternative fuels, including liquefied hydrogen, through December 31, 2017.
  • Alternative Fuel Mixture Excise Tax Credit. Section 40415 also extends the $0.50 per gallon tax credit for alternative fuel used to produce a mixture containing at least 0.1% gasoline, diesel, or kerosene through December 31, 2017. Alternative fuel blenders must be registered with the Internal Revenue Service (IRS). The U.S. Department of the Treasury (Treasury) will issue guidance for how to submit claims for this credit by March 11, 2018.
  • Biodiesel Income Tax Credit. Section 40407 extends the biodiesel income tax credit through December 31, 2017. A taxpayer that delivers unblended biodiesel (B100) into the tank of a vehicle may be eligible for a $1.00 per gallon of biodiesel, agri-biodiesel, or renewable diesel tax credit.
  • Biodiesel Mixture Excise Tax Credit. Section 40407 also extends the $0.50 per gallon tax credit for biodiesel, agri-biodiesel, or renewable diesel used to produce a mixture containing at least 0.1% gasoline, diesel, or kerosene through December 31, 2017. Alternative fuel blenders must be registered with the IRS. Treasury will issue guidance for how to submit claims for this credit by March 11, 2018.
  • Fuel Cell Motor Vehicle Tax Credit. Section 40403 extends the $4,000 tax credit for the purchase of qualified light-duty fuel cell vehicles through December 31, 2017.
  • Qualified Two-Wheeled Plug-In Electric Drive Motor Vehicle Tax Credit. Section 40405 extends the two-wheeled plug-in electric drive motor vehicle tax credit through December 31, 2017. Qualified vehicles are eligible for a tax credit of 10% of the cost of the vehicle, up to $2,500.
  • Second Generation Biofuel Producer Tax Credit. Section 40406 extends the tax credit for second generation biofuel producers through December 31, 2017. Second generation biofuel producers registered with the IRS may be eligible for a $1.01 per gallon of biodiesel tax credit.
  • Second Generation Biofuel Production Property Depreciation Allowance. Section 40412 extends the 50% special depreciation allowance for second generation biofuel production plants through December 31, 2017.

The changes outlined above are effective immediately. To view the full text of the Bipartisan Budget Act, visit https://www.gpo.gov/fdsys/pkg/BILLS-115hr1892enr/pdf/BILLS-115hr1892enr.pdf. See the Alternative Fuels Data Center Federal Laws and Incentives page for descriptions of each incentive.


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