You can claim a credit against your income taxes by completing the IA 4136 Computation of Iowa Motor Fuel Tax Credit 41-036 and attaching it to your year-end income tax return. Both individuals and corporations can take advantage of this method. However, the income tax credit is not available for refunds relating to casualty losses, transport diversions, pumping credits, blending errors, idle time, power takeoffs, reefer units, export by distributors, excess tax paid on gasohol, and tax overpaid on blended fuel. If you are using diesel fuel for an exempt purpose, buy dyed fuel whenever possible. A credit can be claimed on an income tax return for a period up to three years.
The income tax credit cannot be claimed for any year in which a fuel tax refund claim has been filed, unless the refund claim was for casualty losses, transport diversions, pumping credits, blending errors, idle time, power takeoffs, reefer units, export by distributors, or tax overpaid on blended fuel.