Previous Page: Publication 225 - Farmer's Tax Guide - How To Claim a Credit or Refund Next Page: Publication 225 - Farmer's Tax Guide - Estimated Tax Use   to find additional occurrences of topic items.

taxmap/pubs/p225-070.htm#TXMP65fe3579 Including the Credit  or Refund in Income(p82)

Include any credit or refund of excise taxes on fuels in your gross income if you claimed the total cost of the fuel (including the excise taxes) as an expense deduction that reduced your income tax liability.

Which year you include a credit or refund in gross income depends on whether you use the cash or an accrual method of accounting.

taxmap/pubs/p225-070.htm#TXMP68345f41 Cash method.(p82)

If you use the cash method and file a claim for refund, include the refund amount in gross income for the tax year in which you receive the refund. If you claim a credit on your income tax return, include the credit amount in gross income for the tax year in which you file Form 4136. If you file an amended return and claim a credit, include the credit amount in gross income for the tax year in which you receive the credit.

taxmap/pubs/p225-070.htm#TXMP0baa4dc3
Example.(p82)

Sharon Brown, a cash basis farmer, filed her 2007 Form 1040 on March 3, 2008. On her Schedule F, she deducted the total cost of gasoline (including $110 of excise taxes) used on the farm for farming purposes. Then, on Form 4136, she claimed the $110 as a credit. Sharon reports the $110 as other income on 
line 10 of her 2008 Schedule F.

taxmap/pubs/p225-070.htm#TXMP59b0e701 Accrual method.(p82)

If you use an accrual method, include the amount of credit or refund in gross income for the tax year in which you used the fuels. It does not matter whether you filed for a quarterly refund or claimed the entire amount as a credit.

taxmap/pubs/p225-070.htm#TXMP5fc60831
Example.(p82)

Patty Green, an accrual basis farmer, files her 2007 Form 1040 on April 15, 2008. On Schedule F, she deducts the total cost of gasoline (including $155 of excise taxes) she used on the farm for farming purposes during 2007. On Form 4136, Patty claims the $155 as a credit. She reports the $155 as other income on line 10 of her 2007 Schedule F.

Previous Page:  Publication 225 - Farmer's Tax Guide - How To Claim a Credit or Refund Next Page:  Publication 225 - Farmer's Tax Guide - Estimated Tax Use   to find additional occurrences of topic items.