Section 2. BACKGROUND

Sections 6426(a) and (c) allow a blender of a biodiesel (including renewable diesel) mixture to claim a $1.00-per-gallon credit against its tax liability under § 4081 (relating to the tax imposed on taxable fuel). The blender may claim any excess as a payment under § 6427(e) or as a refundable income tax credit under § 34. Similar rules apply to blenders of alternative fuel mixtures (§ 6426(e)) and to persons that sell or use alternative fuel as a fuel in a motor vehicle or a motorboat and in aviation (§ 6426(d)), except that the credit amount is $0.50 per gallon and the credit for alternative fuel is taken against the claimant’s tax liability under § 4041 (relating to the tax imposed on diesel fuel and alternative fuel). As an alternative to the payments and credits allowed under §§ 6426, 6427, and 34, a blender of a biodiesel (including renewable diesel) mixture may claim a nonrefundable income tax credit under § 40A (see Section 3 of this notice for additional information).

The Code provisions that authorize these credits and payments expired for sales and uses after December 31, 2009, but were reinstated by the Act for sales and uses during 2010 and 2011. Sections 701(c) and 704(c) of the Act direct the Secretary of the Treasury (Secretary) to issue guidance providing for a one-time submission of claims under §§ 6426 and 6427 covering periods during 2010. The Act requires the guidance to provide for a 180-day period for the submission of claims (in such manner as prescribed by the Secretary) to begin not later than 30 days after the guidance is issued.