What Is an IRS Form 8849 Schedule 3?

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Today, we will be sharing a post on what is IRS form 8849 Schedule3 and its purpose. We hope that it provides you with the sufficient information you’re looking for.

It all started in the year 2010 when U.S. Tax code underwent several changes, which includes one-year extension of the biodiesel and alternative fuel tax credit that was suppose to expire by the end of 2009. And then, Internal Revenue Service came up with a new schedule, 2010 IRS Schedule 3 (Part of Form 8849), Certain Fuel Mixtures and The Alternative Fuel Credit for tax payers to claim their credit one-time.

IRS Schedule 3 (Form 8849):

Through this form, i.e. IRS Schedule 3 (Form 8849), tax payers can claim a tax credit for any biodiesel or any other alternative fuels they produce or use in the year.


In the year 2009, the congress decided to extend the law offering tax credits for producers and users of biodiesel and alternative fuels for one more year. And that’s how in the year 2010, producers of biodiesel mixtures were allowed to claim a one-time $1 per-gallon credit irrespective of their tax liability, and producers and users of alternative fuel mixtures were able to claim a $.50-per-gallon credit against their tax liability.

Can I Claim A Tax Credit Using Schedule-3? If Yes, How?

Well, if you’re looking to file a claim of credit for alternative fuel and alternative fuel mixture, you need to be registered with the IRS. However, if you’re not registered with IRS, you can apply for registration by filing form 637, Application for Registration (for Certain Excise Tax Activities).

To calculate your tax credit, simply enter the amounts for the year biodiesel and alternative fuel incentives on Lines 2 and 3 of Schedule 3.

Other Requirements:

It is mandatory that the claim for alternative fuel or alternative fuel mixture should be produced in U.S. However, any fuel produced outside U.S. or used outside the United States, cannot claim a tax credit.

And also, the claim must be total of at least $200 until and unless you’re opting for electronic filing. The amount from line 1, 2 and 3 can be combined to reach the minimum amount. If you’re wondering when you got to file your claims, then it is supposed to be filed by the last day of the first quarter after the earliest quarter of the income tax year of the claim. Say for example, if you’re filing a claim for alternative fuel mixture sold or used in the month of June/ July, the last date for filing falls by Sept. 30.

On a final note, if you think of filing your claims electronically, don’t forget to try a hand with TaxExcise.com. We provide you with the most user-friendly service, with customer support by our tax experts through phone (1-866-245-3918) and though Email (support@taxexcise.com). We can assure you, our tax experts will not make you wait too long.