U.S. Individual Income Tax Return Forms

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Instructions for Form 8864
(Rev. December 2025)

Biodiesel, Renewable Diesel, or Sustainable Aviation Fuels Credit
Section references are to the Internal Revenue Code
unless otherwise noted.

Future Developments

For the latest information about developments related to
Form 8864 and its instructions, such as legislation
enacted after they were published, go to IRS.gov/
Form8864.

What’s New

Qualified agri-biodiesel fuel. For fuel sold or used after
June 30, 2025, the qualified agri-biodiesel fuel must be
exclusively derived from feedstock that was produced or
grown in the United States, Mexico, or Canada.
Credit rates. For fuel sold or used from January 1, 2025,
through June 30, 2025, the credit rate is $.10 per gallon.
For fuel sold or used after June 30, 2025, but before
January 1, 2027, the rate increases to $.20 per gallon.
Transfer of the small agri-biodiesel producer credit.
P. L. 119-21 allows a section 6418 transfer election for fuel
sold or used after June 30, 2025. Eligible taxpayers,
partnerships, and S corporations can elect to transfer all
or part of the credit amount otherwise allowed as a
general business credit to an unrelated third-party buyer in
exchange for cash. Eligible taxpayers don’t include
applicable entities. See Credit transfers, later.
Pre-filing registration requirement for credit transfers. The IRS has established a pre-filing registration
process that must be completed prior to electing to
transfer the small agri-biodiesel producer credit. See
Pre-filing registration requirement for transfers, later.

Reminders
Expired credits. The credit period for the section 40A
biodiesel credit, biodiesel mixture credit, and renewable
diesel credit, and the section 40B sustainable aviation
fuels credit, expired for fuel sold or used after December
31, 2024.

General Instructions
Purpose of Form

Use Form 8864 to claim the section 40A small
agri-biodiesel producer credit. Claim the credit for the tax
year in which the sale or use occurs.

Nov 12, 2025

Partnerships, S corporations, cooperatives, estates,
and trusts must file this form to claim the credit. All other
taxpayers aren’t required to complete or file this form if
their only source for this credit is a partnership, S
corporation, cooperative, estate, or trust. Instead, they can
report this credit directly on the appropriate line of Form
3800, General Business Credit.
Credit transfers. Under section 6418, eligible taxpayers,
partnerships, and S corporations can elect to transfer all
or part of the credit figured to an unrelated third-party
buyer in exchange for cash. For more information on credit
transfers, see Transfer of Eligible Credits Under Section
6418 in the Instructions for Form 3800.
Pre-filing registration requirement for transfers.
Before you file your tax return, if you intend to make a
transfer election on Form 3800 for the credit, you must
complete a pre-filing registration. To register, go to
IRS.gov/Register for Elective Payment or Transfer of
Credits. See Pub. 5884, Inflation Reduction Act (IRA) and
CHIPS Act of 2022 (CHIPS) Pre-Filing Registration Tool,
for more information. Also, see Registering for and Making
EPEs and Transfer Elections in the Instructions for Form
3800.

Definitions and Special Rules
Agri-Biodiesel

Agri-biodiesel means biodiesel derived solely from virgin
oils, including esters derived from virgin vegetable oils
from corn, soybeans, sunflower seeds, cottonseeds,
canola, crambe, rapeseeds, safflowers, flaxseeds, rice
bran, mustard seeds, and camelina; and from animal fats.

Qualified Agri-Biodiesel Production

Qualified agri-biodiesel production means up to 15 million
gallons of agri-biodiesel that is produced by an eligible
small agri-biodiesel producer (defined below), and that
during the tax year:
1. Is sold by such producer to another person:
a. For use by such person in the production of a
qualified biodiesel mixture in such other person’s trade or
business (other than casual off-farm production),
b. For use by such person as a fuel in a trade or
business, or
c. Who sells such agri-biodiesel at retail to another
person and places such agri-biodiesel in the fuel tank of
such other person; or

Instructions for Form 8864 (Rev. 12-2025) Catalog Number 66373S
Department of the Treasury Internal Revenue Service www.irs.gov

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Small agri-biodiesel producer credit extension. P. L.
119-21, commonly known as the One Big Beautiful Bill
Act, extended and modified the section 40A small
agri-biodiesel producer credit. The credit is extended
through December 31, 2026. Don’t claim the small
agri-biodiesel producer credit for fuel sold or used after
2026.

Use the December 2025 Form 8864 to report any
biodiesel, renewable fuel, or sustainable aviation fuel
(SAF) credit you received from a fiscal-year partnership, S
corporation, cooperative, estate, or trust whose tax year
began in 2024 (when the credit was still available) and
ends during your 2025 tax year.

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2. Is used or sold by such producer for any purpose
described in (1).
3. If sold or used after June 30, 2025, is exclusively
derived from a feedstock that was produced or grown in
the United States, Mexico, or Canada.
Note: Production of renewable diesel isn’t qualified
agri-biodiesel production.
Eligible small agri-biodiesel producer. An eligible
small agri-biodiesel producer is a person who, at all times
during the tax year, has a productive capacity for
agri-biodiesel not in excess of 60 million gallons.
Aggregation rule. All members of the same controlled
group of corporations (see section 267(f)) and all persons
under common control (see section 52(b) but treat an
interest of more than 50% as a controlling interest) are
treated as one person for purposes of the 15- and
60-million-gallon limits.

Registration

To claim the small agri-biodiesel producer credit, all
producers and importers must be registered with the IRS.
All persons producing blended taxable fuel must be
registered. See Form 637, Application for Registration.

Recapture of Credit

You must pay a tax (recapture) on each gallon of biodiesel
or renewable diesel on which a credit was claimed at the
rate used to figure the credit if you:
• Use it (including a mixture) other than as a fuel;
• Buy it at retail and use it to create a mixture;
• Separate it from a mixture; or
• Use agri-biodiesel on which the small agri-biodiesel
producer credit was claimed for a use not described under
Qualified Agri-Biodiesel Production, earlier.
Report the tax on Form 720, Part II, IRS No. 117, for the
quarter in which you did any of the above.

Additional Information

See Pub. 510, Excise Taxes.

Specific Instructions
Line A

If applicable, enter your pre-filing registration number that
you received from the IRS. See Pre-filing registration
requirement for transfers.

Lines 1, 2, 3, 4, 5, and 6

These lines are now shown as “Reserved for future use.”

Line 7

Use this line to figure the qualified agri-biodiesel for fuel
sold or used before July 1, 2025. The credit rate is $.10
per gallon from January 1, 2025, through June 30, 2025.

2

Line 9

Include this amount in income, under “other income” on
the applicable line of your income tax return, even if you
can’t use all of the credit because of the tax liability limit.
However, if you’re subject to alternative minimum tax
(AMT), this amount isn’t income in figuring AMT and must
be subtracted when figuring your alternative minimum
taxable income. Do this by including this amount on the
appropriate line of:
• Form 6251, Alternative Minimum Tax—Individuals
• Form 1041, Schedule I

Line 10

Use line 10 only if you’ve received a credit that was
allocated to you from a pass-through entity (an S
corporation, partnership, estate, trust, or cooperative).

If you are allocated a small agri-biodiesel producer
credit from a pass-through entity, the entity must tell you
the number of gallons for which it claimed the credit and
its productive capacity for agri-biodiesel. You, as a
shareholder, partner, beneficiary, or patron are subject to
the 15-million-gallon limitation for qualified agri-biodiesel
production and the 60-million-gallon productive capacity
limitation for an eligible small agri-biodiesel producer.

Line 11

Report this amount on Form 3800, Part III, line 1l.
However, if the amount on line 10 includes the SAF credit,
report the amount of the SAF credit on Form 3800, Part III,
line 1ff.

Line 12

A cooperative, estate, or trust allocating the small
agri-biodiesel credit must give the patron or beneficiary a
statement providing them with the number of gallons for
which it claimed the credit and its productive capacity for
agri-biodiesel. An estate or trust must also provide the
amount of the small agri-biodiesel credit included as part
of the pass-through credit. See the instructions for line 10
above.

Cooperatives. A cooperative described in section
1381(a) can elect to allocate any part of the small
agri-biodiesel producer credit to patrons of the
cooperative. The credit is allocated pro rata among the
patrons eligible to share in patronage dividends on the
basis of the quantity or value of business done with or for
the patrons for the tax year.
If the cooperative is subject to the passive activity rules,
include on line 10 any Form 8864 credits from passive
activities disallowed for prior years and carried forward to
this year. Complete Form 8810, Corporate Passive Activity
Loss and Credit Limitations, to determine the allowed
producer credits that can be allocated to patrons. For
details, see the Instructions for Form 8810.
The cooperative is deemed to have made the election
by completing line 12. However, the election isn’t effective
unless:
Instructions for Form 8864 (Rev. 12-2025)

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Partnership, S corporation, and other pass-through
entities. The 15- and 60-million-gallon limits discussed
above are applied at both the entity level and at the
partner or similar level.

Line 8

Use this line to figure the qualified agri-biodiesel for fuel
sold or used after June 30, 2025, but before January 1,
2027. The credit rate is $.20.

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• It’s made on a timely filed return (including extensions);
and
• The cooperative designates the apportionment in a
written notice or Form 1099-PATR, Taxable Distributions
Received From Cooperatives, mailed to its patrons during
the payment period described in section 1382(d).
If you timely filed your return without making an
election, you can still make the election by filing an
amended return within 6 months of the due date of the
return (excluding extensions). Enter “Filed pursuant to
section 301.9100-2” on the amended return.
Once made, the election can’t be revoked.
Estates and trusts. Allocate the biodiesel, renewable
diesel, or sustainable aviation fuel credit on line 11
between the estate or trust and the beneficiaries in the
same proportion as income was allocated, and enter the
beneficiaries’ share on line 12.

If the estate or trust is subject to the passive activity
rules, include on line 10 any Form 8864 credits from
passive activities disallowed for prior years and carried
forward to this year. Complete Form 8582-CR, Passive
Activity Credit Limitations, to determine the allowed credit
that must be allocated between the estate or trust and the
beneficiaries. For details, see the Instructions for Form
8582-CR.

Line 13

Report this amount on Form 3800, Part III, line 1l.
However, if the amount on line 10 includes the SAF credit,
report the amount of the SAF credit on Form 3800, Part III,
line 1ff.

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Instructions for Form 8864 (Rev. 12-2025)

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