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Internal Revenue Code · 26 U.S.C.

§ 6426. Credit for alcohol fuel, biodiesel, and alternative fuel mixtures

In force Text current through Public Law 119-121 (October 9, 2026) release point 119-121

Official text, no changes From the Office of the Law Revision Counsel, release point 119-121 (current through Public Law 119-121 (October 9, 2026)). Compare it with the official text at uscode.house.gov (external site).

Cite as 26 U.S.C. § 6426

At a glance

Read from the text, the source credit and the official notes. Not part of the law.

Status
In force
Added
October 22, 2004 by Pub. L. 108–357
Last amended
July 4, 2025 by Pub. L. 119–21
Amendments
16 dated changes in the source credit
Length
11 subsections · 2,130 words · about 9 min to read
Defines
8 terms
Cross-references
cites 9; cited by 7 Code sections and 4 other regulations
(a) Allowance of credits There shall be allowed as a credit—
(1) against the tax imposed by section 4081 an amount equal to the sum of the credits described in subsections (b), (c), (e), and (k), and
(2) against the tax imposed by section 4041 an amount equal to the sum of the credits described in subsection (d).
No credit shall be allowed in the case of the credits described in subsections (d) and (e) unless the taxpayer is registered under section 4101.
(b) Alcohol fuel mixture credit
(1) In general

For purposes of this section, the alcohol fuel mixture credit is the product of the applicable amount and the number of gallons of alcohol used by the taxpayer in producing any alcohol fuel mixture for sale or use in a trade or business of the taxpayer.

(2) Applicable amount For purposes of this subsection—
(A) In general Except as provided in subparagraphs (B) and (C), the applicable amount is—
(i) in the case of calendar years beginning before 2009, 51 cents, and
(ii) in the case of calendar years beginning after 2008, 45 cents.
(B) Mixtures not containing ethanol

In the case of an alcohol fuel mixture in which none of the alcohol consists of ethanol, the applicable amount is 60 cents.

(C) Reduction delayed until annual production or importation of 7,500,000,000 gallons

In the case of any calendar year beginning after 2008, if the Secretary makes a determination described in section 40(h)(3)(B) with respect to all preceding calendar years beginning after 2007, subparagraph (A)(ii) shall be applied by substituting “51 cents” for “45 cents”.

(3) Alcohol fuel mixture For purposes of this subsection, the term “alcohol fuel mixture” means a mixture of alcohol and a taxable fuel which—
(A) is sold by the taxpayer producing such mixture to any person for use as a fuel, or
(B) is used as a fuel by the taxpayer producing such mixture.
For purposes of subparagraph (A), a mixture produced by any person at a refinery prior to a taxable event which includes ethyl tertiary butyl ether or other ethers produced from alcohol shall be treated as sold at the time of its removal from the refinery (and only at such time) to another person for use as a fuel.
(4) Other definitions For purposes of this subsection—
(A) Alcohol The term “alcohol” includes methanol and ethanol but does not include—
(i) alcohol produced from petroleum, natural gas, or coal (including peat), or
(ii) alcohol with a proof of less than 190 (determined without regard to any added denaturants).
Such term also includes an alcohol gallon equivalent of ethyl tertiary butyl ether or other ethers produced from such alcohol.
(B) Taxable fuel

The term “taxable fuel” has the meaning given such term by section 4083(a)(1).

(5) Volume of alcohol

For purposes of determining under subsection (a) the number of gallons of alcohol with respect to which a credit is allowable under subsection (a), the volume of alcohol shall include the volume of any denaturant (including gasoline) which is added under any formulas approved by the Secretary to the extent that such denaturants do not exceed 2 percent of the volume of such alcohol (including denaturants).

(6) Termination

This subsection shall not apply to any sale, use, or removal for any period after December 31, 2011.

(c) Biodiesel mixture credit
(1) In general

For purposes of this section, the biodiesel mixture credit is the product of the applicable amount and the number of gallons of biodiesel used by the taxpayer in producing any biodiesel mixture for sale or use in a trade or business of the taxpayer.

(2) Applicable amount

For purposes of this subsection, the applicable amount is $1.00.

(3) Biodiesel mixture For purposes of this section, the term “biodiesel mixture” means a mixture of biodiesel and diesel fuel (as defined in section 4083(a)(3)), determined without regard to any use of kerosene, which—
(A) is sold by the taxpayer producing such mixture to any person for use as a fuel, or
(B) is used as a fuel by the taxpayer producing such mixture.
(4) Certification for biodiesel

No credit shall be allowed under this subsection unless the taxpayer obtains a certification (in such form and manner as prescribed by the Secretary) from the producer of the biodiesel which identifies the product produced and the percentage of biodiesel and agri-biodiesel in the product.

(5) Other definitions

Any term used in this subsection which is also used in section 40A shall have the meaning given such term by section 40A.

(6) Termination

This subsection shall not apply to any sale, use, or removal for any period after December 31, 2024.

(d) Alternative fuel credit
(1) In general

For purposes of this section, the alternative fuel credit is the product of 50 cents and the number of gallons of an alternative fuel or gasoline gallon equivalents of a nonliquid alternative fuel sold by the taxpayer for use as a fuel in a motor vehicle or motorboat, sold by the taxpayer for use as a fuel in aviation, or so used by the taxpayer.

(2) Alternative fuel For purposes of this section, the term “alternative fuel” means—
(A) liquefied petroleum gas,
(B) P Series Fuels (as defined by the Secretary of Energy under section 13211(2) of title 42, United States Code),
(C) compressed or liquefied natural gas,
(D) any liquid fuel which meets the requirements of paragraph (4) and which is derived from coal (including peat) through the Fischer-Tropsch process,
(E) compressed or liquefied gas derived from biomass (as defined in section 45K(c)(3)), and
(F) liquid fuel derived from biomass (as defined in section 45K(c)(3)).
Such term does not include ethanol, methanol, biodiesel, or any fuel (including lignin, wood residues, or spent pulping liquors) derived from the production of paper or pulp.
(3) Gasoline gallon equivalent

For purposes of this subsection, the term “gasoline gallon equivalent” means, with respect to any nonliquid alternative fuel, the amount of such fuel having a Btu content of 124,800 (higher heating value).

(4) Carbon capture requirement
(A) In general

The requirements of this paragraph are met if the fuel is certified, under such procedures as required by the Secretary, as having been derived from coal produced at a gasification facility which separates and sequesters not less than the applicable percentage of such facility’s total carbon dioxide emissions.

(B) Applicable percentage For purposes of subparagraph (A), the applicable percentage is—
(i) 50 percent in the case of fuel produced after September 30, 2009, and on or before December 30, 2009, and
(ii) 75 percent in the case of fuel produced after December 30, 2009.
(5) Termination

This subsection shall not apply to any sale or use for any period after December 31, 2024.

(e) Alternative fuel mixture credit
(1) In general

For purposes of this section, the alternative fuel mixture credit is the product of 50 cents and the number of gallons of alternative fuel used by the taxpayer in producing any alternative fuel mixture for sale or use in a trade or business of the taxpayer.

(2) Alternative fuel mixture For purposes of this section, the term “alternative fuel mixture” means a mixture of alternative fuel (other than a fuel described in subparagraph (A), (C), or (E) of subsection (d)(2)) and taxable fuel (as defined in subparagraph (A), (B), or (C) of section 4083(a)(1)) which—
(A) is sold by the taxpayer producing such mixture to any person for use as fuel, or
(B) is used as a fuel by the taxpayer producing such mixture.
(3) Termination

This subsection shall not apply to any sale or use for any period after December 31, 2024.

(f) Mixture not used as a fuel, etc.
(1) Imposition of tax If—
(A) any credit was determined under this section with respect to alcohol or biodiesel used in the production of any alcohol fuel mixture or biodiesel mixture, respectively, and
(B) any person—
(i) separates the alcohol or biodiesel from the mixture, or
(ii) without separation, uses the mixture other than as a fuel,
then there is hereby imposed on such person a tax equal to the product of the applicable amount and the number of gallons of such alcohol or biodiesel.
(2) Applicable laws

All provisions of law, including penalties, shall, insofar as applicable and not inconsistent with this section, apply in respect of any tax imposed under paragraph (1) as if such tax were imposed by section 4081 and not by this section.

(g) Coordination with exemption from excise tax

Rules similar to the rules under section 40(c) shall apply for purposes of this section.

(h) Denial of double benefit

No credit shall be determined under subsection (d) or (e) with respect to any fuel with respect to which credit may be determined under subsection (b) or (c) or under section 40, 40A, or 40B.

(i) Limitation to fuels with connection to the United States
(1) Alcohol

No credit shall be determined under this section with respect to any alcohol which is produced outside the United States for use as a fuel outside the United States.

(2) Biodiesel and alternative fuels

No credit shall be determined under this section with respect to any biodiesel or alternative fuel which is produced outside the United States for use as a fuel outside the United States.

For purposes of this subsection, the term “United States” includes any possession of the United States.
(j) Energy equivalency determinations for liquefied petroleum gas and liquefied natural gas For purposes of determining any credit under this section, any reference to the number of gallons of an alternative fuel or the gasoline gallon equivalent of such a fuel shall be treated as a reference to—
(1) in the case of liquefied petroleum gas, the energy equivalent of a gallon of gasoline, as defined in section 4041(a)(2)(C), and
(2) in the case of liquefied natural gas, the energy equivalent of a gallon of diesel, as defined in section 4041(a)(2)(D).
(k) Sustainable aviation fuel credit
(1) In general For purposes of this section, the sustainable aviation fuel credit for the taxable year is, with respect to any sale or use of a qualified mixture, an amount equal to the product of—
(A) the number of gallons of sustainable aviation fuel in such mixture, multiplied by
(B) the sum of—
(i) $1.25, plus
(ii) the applicable supplementary amount with respect to such sustainable aviation fuel.
(2) Definitions

Any term used in this subsection which is also used in section 40B shall have the meaning given such term by section 40B.

(3) Registration requirement

For purposes of this subsection, rules similar to the rules of section 40B(f) shall apply.

(4) Coordination of credits

With respect to any gallon of sustainable aviation fuel in a qualified mixture, this subsection shall not apply to any such gallon for which a credit under section 45Z is allowable (as determined without regard to subsection (a)(1)(A) of such section).

(5) Termination

This subsection shall not apply to any sale or use for any period after September 30, 2025.

(Added Pub. L. 108–357, title III, § 301(a), Oct. 22, 2004, 118 Stat. 1459; amended Pub. L. 109–58, title XIII, § 1344(a), Aug. 8, 2005, 119 Stat. 1052; Pub. L. 109–59, title XI, §§ 11113(b)(1)–(3)(A), 11151(e)(2), Aug. 10, 2005, 119 Stat. 1947, 1948, 1969; Pub. L. 110–172, § 5(a)(2), (3), Dec. 29, 2007, 121 Stat. 2479; Pub. L. 110–234, title XV, §§ 15331(b), 15332(b), May 22, 2008, 122 Stat. 1516; Pub. L. 110–246, § 4(a), title XV, §§ 15331(b), 15332(b), June 18, 2008, 122 Stat. 1664, 2278; Pub. L. 110–343, div. B, title II, §§ 202(a), (b)(2), 203(c)(1), 204(a)(1), (2), (b), (c), Oct. 3, 2008, 122 Stat. 3832, 3834; Pub. L. 111–312, title VII, §§ 701(b)(1), 704(a), (b), 708(b)(1), Dec. 17, 2010, 124 Stat. 3310–3312; Pub. L. 112–240, title IV, §§ 405(b)(1), 412(a), Jan. 2, 2013, 126 Stat. 2340, 2343; Pub. L. 113–295, div. A, title I, § 160(a)(1), (b)(1), (c)(1), Dec. 19, 2014, 128 Stat. 4022; Pub. L. 114–113, div. Q, title I, §§ 185(b)(1), 192(a)(1), title III, § 342(a), Dec. 18, 2015, 129 Stat. 3073, 3075, 3114; Pub. L. 115–123, div. D, title I, §§ 40407(b)(1), 40415(a)(1), Feb. 9, 2018, 132 Stat. 149, 152; Pub. L. 115–141, div. U, title IV, § 401(a)(294), Mar. 23, 2018, 132 Stat. 1198; Pub. L. 116–94, div. Q, title I, §§ 121(b)(1)(A), 133(a)(1), (b)(1), Dec. 20, 2019, 133 Stat. 3230, 3233; Pub. L. 116–260, div. EE, title I, § 147(a), Dec. 27, 2020, 134 Stat. 3055; Pub. L. 117–169, title I, §§ 13201(b)(1), (c), (d), 13203(d)(1), (2)(A), 13204(d)(1), (2), Aug. 16, 2022, 136 Stat. 1931, 1932, 1934, 1935, 1941; Pub. L. 119–21, title VII, § 70521(g)(1)(A), (h), July 4, 2025, 139 Stat. 277, 278.)

Terms defined here

Where the text says “the term … means”. Select a term to jump to its definition.

Cross-references

Computed from the citations in the text of Title 26 and 26 CFR.

This section cites 9 other sections

Cited by 7 Code sections

Cited in 4 regulations not issued under it

Amendment history

From the source credit and the official notes, newest first.

  1. Amended by Pub. L. 119–21Parts changed in 2025: (k)(4) (k)(5)
  2. Amended by Pub. L. 117–169Parts changed in 2022: (a)(1) (c)(6) (d)(2)(D) (d)(5) (e)(2) (e)(3) (h) (k)
  3. Amended by Pub. L. 116–260Parts changed in 2020: (d)(5)
  4. Amended by Pub. L. 116–94Parts changed in 2019: (c)(6) (d)(5) (e)(2) (e)(3)
  5. Amended by Pub. L. 115–141Parts changed in 2018: (b)(2)(A)(ii) (c)(6) (d)(5)
  6. Amended by Pub. L. 115–123
  7. Amended by Pub. L. 114–113Parts changed in 2015: (c)(6) (d)(5) (j)
  8. Amended by Pub. L. 113–295Parts changed in 2014: (c)(6) (d)(5)
  9. Amended by Pub. L. 112–240Parts changed in 2013: (c)(6) (d)(5)
  10. Amended by Pub. L. 111–312Parts changed in 2010: (b)(6) (c)(6) (d)(2) (d)(5)
  11. Amended by Pub. L. 110–343Parts changed in 2008: (b)(2)(A) (b)(2)(C) (b)(5) (c)(2) (c)(6) (d)(1) (d)(2)(E) (d)(2)(F) (d)(4) (d)(5) (e)(3) (i)
  12. Amended by Pub. L. 110–246
  13. Amended by Pub. L. 110–234
  14. Amended by Pub. L. 110–172Parts changed in 2007: (d)(2)(F) (h)
  15. Amended by Pub. L. 109–59Parts changed in 2005: (a) (c)(6) (d) (d)(2)(F) (e)
  16. Amended by Pub. L. 109–58
  17. Added by Pub. L. 108–357

Where it sits in the Code

  1. Subtitle F Procedure and Administration
  2. Chapter 65 ABATEMENTS, CREDITS, AND REFUNDS
  3. Subchapter B Rules of Special Application

Nearby sections

Official notes

The Law Revision Counsel's notes for this section (amendments, effective dates and related laws) are long, so they have their own page.