Second Generation Biofuel Producer Credit – I.R.C. § 40(b)(6)


Formerly known as the Cellulosic Biofuel Producer Credit, this credit equals $1.01 per qualifying gallon produced. The biofuel must be produced and used as a fuel in the United States. Credits under I.R.C. § 40 offset federal income tax. The credit amount under § 40 is reduced if credits or exemptions are taken against federal excise taxes. If producer is an LLC, the credits flow through and are taken by the members on their individual tax returns. The credit amount must be included in income. Section 40(b)(6) credits are currently set to expire after 2016.


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