Under the International Fuel Tax Agreement, a fuel tax credit arises whenever the tax you paid at the pump in a jurisdiction exceeds the tax you actually owe there for the miles you drove, and the quarterly return nets those credits against underpayments elsewhere. If the balance across all jurisdictions comes out in your favor, you can either carry the credit forward to the next quarter or submit a written refund request to your base jurisdiction. IFTA fuel tax credits and refunds are the mechanism that recovers the money strategic fueling and rate differences leave in the system.
How a Credit Is Generated
Every gallon of diesel you buy has state or provincial fuel tax built into the pump price. That tax-paid amount goes into your credit bank for the jurisdiction where you bought the fuel. Your liability in that same jurisdiction is a separate calculation: it depends on how many gallons you consumed there based on miles driven, not on where you happened to fill up.
When the tax you already paid at the pump in a jurisdiction is larger than the tax you owe for miles driven there, the difference is a credit. The reverse produces a liability. A driver who fills both tanks in Pennsylvania, where diesel tax exceeds 74 cents per gallon, and then runs most of those miles through lower-rate states, will show a large Pennsylvania credit and small liabilities in the states downstream. Diesel rates across IFTA jurisdictions currently run from under 10 cents per gallon to nearly a dollar.1IFTA, Inc. 4th Quarter 2025 Fuel Tax Rates That spread is what makes the credit side of the return worth chasing.
How the Quarterly Math Works
The calculation on the return is mechanical once you know the sequence:
- Add every mile driven during the quarter across all IFTA jurisdictions to get total miles.
- Sum every gallon of fuel purchased during the quarter, regardless of location, to get total gallons.
- Divide total miles by total gallons. That fleet MPG applies across all jurisdictions for the quarter.
- For each jurisdiction, divide the miles driven there by the fleet MPG. The result is your taxable gallons for that jurisdiction.
- Multiply taxable gallons by the jurisdiction’s fuel tax rate to get tax owed.
- Subtract tax already paid at the pump in that jurisdiction. A negative result is a credit; a positive result is a liability.
Fleet MPG drives everything. If you average 6.0 MPG and drove 12,000 miles in a jurisdiction, the return treats you as consuming 2,000 gallons there whether you fueled locally or not. Better fuel economy means fewer taxable gallons allocated per jurisdiction, which reduces liability across the board.
The numbers feed two forms: the IFTA-101 schedule, which captures miles and fuel by jurisdiction, and the IFTA-100 return, which produces the net credit or liability. Your base jurisdiction supplies both, usually through an online portal.
Refund or Carry Forward
A return that ends in a net credit gives you two paths. You can let the balance roll forward to offset the next quarter’s tax, or you can ask for cash. Small carriers often roll credits because it simplifies the next payment. Larger balances are worth thinking about differently: a credit sitting on the books is an interest-free loan to the government.
To get the cash, you submit a written refund request to your base jurisdiction, unless that jurisdiction has an automatic refund policy.2IFTA, Inc. IFTA Articles of Agreement The base jurisdiction will only cut a check after every outstanding fuel tax liability has been satisfied across every IFTA member, including any audit assessments. If you owe money in one jurisdiction, your credit gets applied against that balance before anything is refunded. Some base jurisdictions also set a minimum dollar threshold below which they will not issue a check and will carry small balances forward instead.
Two deadlines matter. Credits that are neither refunded nor fully used against future liabilities expire eight calendar quarters after the end of the quarter in which they accrued.2IFTA, Inc. IFTA Articles of Agreement That is a two-year window; sit on a credit longer and you lose it. On the other side, if you have properly requested a refund and the jurisdiction does not pay within 90 days, interest starts accruing in your favor at the same rate charged on late payments.
Records That Hold Up the Claim
Refund claims fall apart on documentation more than on math. Every fuel receipt has to show the gallons purchased, the date, the vendor name and location including city and jurisdiction, and the price paid including tax. A receipt missing any of those pieces can be thrown out of your tax-paid credits during an audit, which reduces the credit side of your calculation and can turn a refund into a bill.
Distance records carry the same weight. You need miles driven in each jurisdiction for every trip, with routes, origins, destinations, and stops. Electronic logging devices can produce this, but the tracking has to generate a record at least every 10 minutes when the engine is running, capture latitude and longitude to four decimal places, and record the odometer reading and vehicle identification number. The data also has to be exportable in a spreadsheet format such as CSV or Excel. PDF screenshots and image files are not acceptable.
IFTA requires you to keep these records for four years from the return’s due date or filing date, whichever is later.3IFTA, Inc. IFTA Procedures Manual Filing a refund request extends that clock until the request is granted or denied. No refund or assessment can be made for a period where records are no longer required.
Amending a Prior Return
If you find a missed receipt or a mileage error after filing, you can file an amended return. IFTA does not set a single uniform amendment procedure; your base jurisdiction dictates the form or process, whether a dedicated amended return or a direct request to the tax office. The time window for corrections tracks the four-year retention period.3IFTA, Inc. IFTA Procedures Manual Occasional amendments are normal. Filing them every quarter is a pattern auditors notice.
Deadlines and What Late Filing Costs
Quarterly returns are due on the last day of the month after the quarter closes:
- January through March: due April 30
- April through June: due July 31
- July through September: due October 31
- October through December: due January 31
File even if you had no operations. A zero-mile return is still required.
Missing a deadline triggers a penalty of $50 or 10 percent of the delinquent tax, whichever is greater.2IFTA, Inc. IFTA Articles of Agreement The penalty attaches to the act of filing late, not to owing money, so it hits carriers who were owed a refund too. Interest also accrues monthly on any unpaid balance. For 2026, the annual rate for U.S. fleets is 9 percent, one-twelfth of that per month, and it resets each January based on the IRS underpayment rate plus two percentage points.4IFTA, Inc. IFTA Annual Interest Rate Filing late when you expect a refund also delays processing and pushes your return back in the queue.
One Boundary Worth Naming
IFTA does not refund fuel burned by equipment other than the vehicle’s propulsion engine. If your truck runs a refrigeration unit, a power take-off, or an auxiliary power unit from the same tank, that fuel never moved the vehicle down a public highway. The recovery for that use is the federal fuel tax credit on IRS Form 4136, which covers off-highway business use of fuel.5Internal Revenue Service. Fuel Tax Credit It requires its own records separating gallons by use, with invoices showing dates, quantities, and purpose. Distance driven off public highways, on closed forest roads, or under a fuel trip permit is handled inside IFTA as non-taxable miles, subtracted from taxable miles on the return; specific exemptions vary by jurisdiction.