To file Form 720, identify which federal excise taxes apply to your business, complete Parts I and II along with Schedules A and C as needed, deposit tax semi-monthly through EFTPS if you have Part I liabilities, and submit the return by the last day of the month after each quarter. Here is how to file Form 720 step by step, along with the deposit rules, deadlines, and penalties that determine whether your return is treated as timely and complete.
Form 720 applies only to businesses that collect or owe one of the excise taxes listed in Parts I and II of the form. If none of those taxes touch your operations, this return is not one you need to file. Once you are liable, the obligation continues every quarter until you file a final return, even in quarters with no taxable activity.1Internal Revenue Service. Instructions for Form 720
Before You File: Registration and EFTPS
Two setup steps trip up new filers, and both take time you should not compress into the week a return is due.
First, some excise activities require advance registration on Form 637. Fuel blenders, registered ultimate vendors who plan to claim credits on nontaxable fuel sales, and businesses handling ozone-depleting chemicals need a registration number before they can file valid claims or credits on Form 720.2Internal Revenue Service. About Form 637, Application for Registration Apply well before your first filing deadline.
Second, enroll in the Electronic Federal Tax Payment System. Semi-monthly deposits and most balance-due payments run through EFTPS, which is the free system operated by the Treasury.3Internal Revenue Service. EFTPS The Electronic Federal Tax Payment System New businesses should enroll as soon as they receive an EIN; the PIN package typically arrives by mail within five business days.4Internal Revenue Service. EFTPS Express Enrollment for New Businesses If it has not shown up after a week, call EFTPS Customer Service at 1-800-555-4477.
Filling Out Form 720
Download the current revision from irs.gov. As of this writing, the latest is the March 2026 revision. The form has a header, two main parts, and two schedules that most filers touch.
Header and Business Information
Enter your legal business name, address, and EIN at the top. Check the applicable boxes if this is a final return, if your address has changed, or to identify the quarter you are filing for. A mismatched name or EIN will delay processing.
Part I: Taxes That Accrue Across the Quarter
Part I covers excise taxes that build up throughout the quarter, including fuel taxes, the air transportation tax, the communications tax, environmental taxes, and manufacturers’ taxes. Each tax has its own IRS number and its own line. Find the IRS numbers that apply, enter the taxable gallons, amounts, or units, and multiply by the rate the instructions specify for that line.1Internal Revenue Service. Instructions for Form 720
Keep a running ledger during the quarter that separates excise obligations from general revenue. If you have Part I liabilities, you almost certainly need to make semi-monthly deposits and complete Schedule A.
Part II: Taxes Tied to a Specific Period
Part II is for taxes where liability attaches to when the activity occurred rather than accruing across the quarter. Indoor tanning services and the Patient-Centered Outcomes Research (PCORI) fee are reported here. Part II taxes are generally paid with the return itself, not through semi-monthly deposits.1Internal Revenue Service. Instructions for Form 720 The PCORI fee, owed by health insurance issuers and self-insured plan sponsors, is due once a year with the second-quarter return.5Internal Revenue Service. Patient Centered Outcomes Research Trust Fund Fee
Schedule A: Net Tax Liability
Schedule A breaks the quarter into semi-monthly periods and shows how much excise tax you owed during each one. The IRS uses it to verify that your deposits matched liability as it accrued. Anyone with Part I liabilities must complete it, and the Schedule A totals should reconcile with your Part I figures.6Internal Revenue Service. About Form 720, Quarterly Federal Excise Tax Return
Schedule C: Claims and Credits
Schedule C is where you claim credits for excise tax already paid on fuel used for a nontaxable purpose. Common examples: diesel or gasoline used by a state or local government, fuel used in farming, and kerosene used in commercial aviation. It also handles claims by registered ultimate vendors who sold fuel for exempt uses.1Internal Revenue Service. Instructions for Form 720 Each credit line needs a Credit Reference Number and the number of gallons. Ultimate vendor credits require Form 637 registration.
Semi-Monthly Deposits
Most businesses with Part I liabilities must deposit excise taxes twice a month rather than once a quarter. Each month splits into two deposit periods: the 1st through the 15th, and the 16th through the end of the month. Deposits are due 14 days after the period closes. Taxes accrued from the 1st through the 15th are due by the 29th, and taxes from the 16th through the end of the month are due by the 14th of the following month.
Deposits go through EFTPS and are reported by period on Schedule A. Missing a deposit triggers a penalty scaled to how late it is: 2 percent if no more than 5 days late, 5 percent if 6 to 15 days late, and 10 percent if more than 15 days late. The rate rises to 15 percent if the deposit is still outstanding 10 days after the IRS sends a delinquency notice.7Office of the Law Revision Counsel. 26 USC 6656 – Failure to Make Deposit of Taxes
The main exception: no semi-monthly deposit is required if your net Part I liability for the entire quarter is $2,500 or less. In that case you can pay the balance with the return. The same rule applies to a one-time Gas Guzzler filing and to the PCORI fee filed with a second-quarter return.1Internal Revenue Service. Instructions for Form 720
Quarterly Filing Deadlines
Form 720 is due by the last day of the month following the end of each quarter:6Internal Revenue Service. About Form 720, Quarterly Federal Excise Tax Return
- Q1 (January–March): April 30
- Q2 (April–June): July 31
- Q3 (July–September): October 31
- Q4 (October–December): January 31 of the following year
When a due date falls on a Saturday, Sunday, or legal holiday, the deadline shifts to the next business day. For paper returns, the postmark date counts as the filing date. Electronic submissions are timestamped when transmitted.
A late return triggers a failure-to-file penalty of 5 percent of the unpaid tax for each month or partial month the return is overdue, up to 25 percent.8Internal Revenue Service. Failure to File Penalty A separate failure-to-pay penalty of 0.5 percent per month, also capped at 25 percent, runs on any tax not paid by the due date.9Internal Revenue Service. Failure to Pay Penalty Both stack.
How to Submit and Pay
E-File
Form 720 can be filed electronically through an IRS-approved Modernized e-File provider. E-filing gives you immediate confirmation of receipt and faster processing.10Internal Revenue Service. Excise Tax e-File and Compliance (ETEC) Programs The IRS maintains a list of approved software providers.
Paper
Paper returns go to:1Internal Revenue Service. Instructions for Form 720
Department of the Treasury
Internal Revenue Service
Ogden, UT 84201-0009
The IRS keys paper returns manually, so unclear entries invite errors.
Paying a Balance Due
Most payments run through EFTPS. If you are paying a balance with a paper return by check or money order, include Form 720-V, the payment voucher printed at the bottom of Form 720. Make the payment to “United States Treasury” and write your EIN and “Form 720” on the check.6Internal Revenue Service. About Form 720, Quarterly Federal Excise Tax Return Without the voucher, the IRS may credit the payment to the wrong account or period and issue a late-payment notice on a payment you actually made on time.
Fixing a Mistake on a Return You Already Filed
If you discover an error on a Form 720 already filed, correct it on Form 720-X. You cannot adjust the current quarter’s return to fix a prior quarter’s mistake.11Internal Revenue Service. Form 720-X
For adjustments that reduce liability (a refund or credit), you generally have three years from the date the original return was filed or two years from the date the tax was paid, whichever is later. You can mail Form 720-X separately to the IRS at Cincinnati, OH 45999-0009, or attach it to your next Form 720. Each adjustment needs a detailed explanation on Line 6, including the computation. If the correction produces additional tax, include payment.
One limitation: Form 720-X cannot amend most Schedule C claims. The only exceptions are the Section 4051(d) tire credit and Section 6426 fuel credits.11Internal Revenue Service. Form 720-X Other Schedule C corrections generally go on Form 8849, Claim for Refund of Excise Taxes.
Records to Keep
Hold onto invoices, sales logs, fuel purchase records, deposit confirmations, and the filed returns themselves for at least three years from the filing date. That is the standard period during which the IRS can assess additional tax.12Internal Revenue Service. Recordkeeping If you underreported excise taxes by more than 25 percent of the amount shown on the return, the assessment window extends to six years. If a return was fraudulent or never filed, there is no time limit. Businesses with ongoing excise obligations are on safer ground keeping records for at least six years.