IRS Fuel Tax Credit: What Can You Claim This Winter?

Winter is often the season when propane companies feel pressure from every direction at once. Colder weather increases delivery demand, operating hours stretch longer into the evening, and costs tied to fuel, labor, and equipment rise quickly. At the same time, many companies are reviewing year-end numbers and getting a jump start on early tax planning for the months ahead. That makes now a good time to look closely at the IRS Fuel Tax Credit and other common deductions that may affect cash flow while winter operations are at their peak.

The IRS Fuel Tax Credit, claimed using Form 4136, can provide a refundable credit for certain fuel used in qualified business activities. For propane companies, eligibility depends on how and where the fuel is used. Fuel consumed in off-highway business use, some stationary equipment, or other approved activities may qualify, while fuel used for standard highway driving often does not. The credit is not automatic, and the IRS is clear that accurate records and eligibility checks are required. Incomplete logs or unclear use can lead to denied claims or later adjustments.

Beyond the fuel tax credit, the IRS reminds businesses to review other core deductions during tax planning. Vehicle expenses remain a major category to look at, especially for bobtails and service trucks that work long hours in winter conditions. Companies must choose between actual expenses and the standard mileage method and stay consistent with IRS rules. Depreciation of equipment such as truck bodies, pumps, and tanks may also apply if assets were placed in service this year. Wages paid for overtime, seasonal drivers, and support staff during cold months are generally deductible, as are ordinary and necessary costs tied to safe operations.

Winter driving also increases safety risks that affect both a company’s costs and records. Snow, ice, limited daylight, and longer routes raise the chance of slips, vehicle wear, and weather-related delays. These factors often lead to higher maintenance expenses, tire replacements, and safety gear purchases, all of which may factor into deductions if properly documented.

Taking time now to review your fuel use, vehicle records, and winter operating costs can help your propane company make informed decisions that will serve to protect both your safety compliance and cash flow during the most demanding season of the year.