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Form 8904: Credit for Oil and Gas Production From Marginal Wells
IRS Form 8904 is the Credit for Oil and Gas Production From Marginal Wells. It lets partnerships and S corporations claim the section 45I credit, such as the $0.79 per thousand cubic feet rate for 2025, for qualified natural‑gas production.
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IRS Form 8904 - Credit for Oil and Gas Production From Marginal Wells
IRS Form 8904 is the Credit for Oil and Gas Production From Marginal Wells. It lets partnerships and S corporations claim the section 45I credit, such as the $0.79 per thousand cubic feet rate for 2025, for qualified natural‑gas production.
Risk Radar
Scan points- 1Missing the 3‑year claim window after the return due date eliminates the credit.
- 2Enter the wrong amount on line 2, such as using $0.50 instead of the required $0.79 for 2025.
- 3Omit the total credit from Schedule K‑1 boxes on line 7, leaving the line blank.
- 4Report the credit on Form 3800 instead of Form 8904 when filing as a partnership or S corporation.
- 5Claim the credit after the three‑year period following the return’s due date, which disqualifies the claim.
Plain English
Form 8904 is used to report a tax credit for oil and gas that comes from marginal wells. Partnerships and S corporations fill it out to get a credit of $0.79 for every thousand cubic feet of natural gas they produce in 2025. The credit is part of the general business credit and must be entered on the form before the return is filed.
Submission Date
- Filing date: 2025-12-04 14:35:47
- Preparation window: collect IDs, supporting records, and signatures in advance.
- Final review: verify names, dates, and required fields before submission.
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What this form is for
- Use this form when a partnership or S corporation claims the section 45I credit for qualified natural‑gas production for tax years beginning in 2025.
- Do not use it when the taxpayer is not a partnership or S corporation and the only credit source is from such an entity.
- Check Form 3800 instead when the credit can be reported directly without using earlier lines on Form 8904.
Form selector
Use this form or another form?
Partnership or S corporation filing credit on line 7
Required to report the credit on line 7 as instructed
✓ Confirm partnership/S‑corp status and line 7 usage
Taxpayer only has credit from a partnership or S corporation and wants to claim it directly
Credit may be reported on Form 3800 Part III line 1bb for 2025
✓ Verify no amounts entered on Form 8904 lines 1‑3
Need to pull credit amount from a Schedule K‑1
Credit amount appears in box 15 code P on partnership K‑1
✓ Check box 15 code P for correct amount
Deadline or filing window
The credit can be claimed any time within three years after the due date (excluding extensions) of the original or amended return. No separate extension is provided for Form 8904; the three‑year period is the only deadline.
Checklist
What you need before filling it out
Line 2 credit amount
Inflation‑adjusted rate $0.79 per thousand cubic feet · Instructions p.1
Line 7 total credit
Sum from Schedule K‑1 (Form 1065) box 15 code P or Schedule K‑1 (Form 1120‑S) box 13 code P · Instructions p.2
Qualified natural gas production
Quantity in thousands of cubic feet · Form p.1 line 1
Reserved lines 4‑6
Leave blank · Form p.1 lines 4‑6
Partner/Shareholder identification
Name and identifying number · Form p.1 top section
Before you submit
- 1Verify line 1 quantity is entered in thousands of cubic feet
- 2Confirm line 2 credit amount is $0.79 per thousand cubic feet
- 3Multiply line 1 by line 2 and enter the result on line 3
- 4Leave lines 4‑6 blank as they are reserved
- 5Enter total credit on line 7 from the appropriate Schedule K‑1 boxes
- 6Attach completed Form 8904 to the tax return
- 7Sign the tax return and retain a copy for your records
How to file this form
- 1Gather qualified natural gas production data and record it in thousands of cubic feet
- 2Enter the production amount on line 1 of Form 8904
- 3Enter the $0.79 credit rate on line 2 and compute line 3
- 4Transfer the total credit from the relevant Schedule K‑1 to line 7
- 5Attach the completed Form 8904 to the appropriate tax return
- 6Sign the tax return and keep a copy for your records
- 7Mail the return to the IRS or e‑file and obtain a delivery receipt as proof of filing
Known limitations
- 1The credit does not apply to tax years beginning before 2025
- 2The credit is phased out for crude oil production
- 3Taxpayers whose only credit source is a partnership or S corporation are not required to file Form 8904
- 4Corporations other than S corporations must not use this form
Field map
Compact field-by-field guide
Entity Info
1 items
Name and taxpayer ID of the entity claiming the credit.
Credit Info
1 items
Type of credit or incentive being claimed.
Calculation
2 items
The base amount used to calculate the credit.
Calculated credit amount after applying formulas and limitations.
Certification
1 items
Detailed breakdown supporting the credit calculation.
Signatures
1 items
Sign and date the form.
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Fillable formOpen in Editor->Form 8904 shows Rev. October 2024 on the form and points to www.irs.gov/Form8904 for the latest information.
What changed or needs a fresh check
- Edition date — confirm the form shows Rev. October 2024
- Fee — confirm no filing fee is required
- Mailing address — confirm the correct IRS address for filing
- Signature — confirm the return is signed as required
- OMB control number — confirm OMB No. 1545-2278 appears
Quick Facts
Downloads
After you file
- 1Retain the completed Form 8904 and supporting Schedule K‑1s with your tax records
- 2Keep the records for as long as their contents may become material to any tax matter
- 3Expect the credit to appear on your tax return after processing
- 4If the IRS issues a notice of error, file an amended return using Form 1040X
- 5Store the filing receipt or electronic confirmation for future reference
Sources
- SRCInstructions p.1 — credit amount $0.79 per thousand cubic feet for 2025
- SRCInstructions p.1 — Partnerships and S corporations must file this form
- SRCInstructions p.1 — Other taxpayers may report the credit on Form 3800
- SRCInstructions p.2 — Line 7 credit comes from Schedule K‑1 (Form 1065) box 15 code P
- SRCInstructions p.2 — Line 7 credit also comes from Schedule K‑1 (Form 1120‑S) box 13 code P
- SRCForm p.1 — OMB No. 1545-2278 appears on the form
- SRCForm p.1 — Reserved lines 4‑6 are for future use
- SRCForm p.1 — Line 2 entry instruction to use $0.79 credit amount
- SRCNot stated in the official source — filing deadline
- SRCNot stated in the official source — fee
Common confusion points
Do I need to fill lines 4‑6?
They are reserved for future use
→ Leave them blank
Which credit rate should I use?
Instructions list $0.79 for 2025 after inflation adjustment
→ Confirm $0.79 on line 2
Can I report the credit on Form 3800 instead?
Only if no amounts are entered on earlier lines of Form 8904
→ Verify lines 1‑3 are empty before using Form 3800
Do I have to attach the Schedule K‑1?
The form requires the data but not the attachment
→ Ensure K‑1 data is entered correctly
Is there a filing deadline for Form 8904?
The source does not state a specific deadline
→ Check the due date of the associated tax return
Do I need to sign Form 8904 separately?
Signature requirement is not detailed in the source
→ Sign the overall tax return as required
Workflow map
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Questions about IRS Form 8904
What is IRS Form 8904 used for?
Form 8904 is used to report a tax credit for oil and gas that comes from marginal wells. Partnerships and S corporations fill it out to get a credit of $0.79 for every thousand cubic feet of natural gas they produce in 2025. The credit is part of the general business credit and must be entered on the form before the return is filed.
Who must file IRS Form 8904?
Partnerships and S corporations must file IRS Form 8904 to claim the credit.
What information does IRS Form 8904 require?
The form collects the credit amount on line 2 (the $0.79 per thousand cubic feet rate for 2025) and the total credit from Schedule K‑1 boxes (Form 1065 box 15 code P or Form 1120‑S box 13 code P) on line 7.
How do I complete IRS Form 8904?
Enter $0.79 on line 2 for tax years beginning in 2025. Then total the credit from the appropriate Schedule K‑1 boxes and report that amount on line 7. File the completed Form 8904 with the partnership’s or S corporation’s tax return. Retain records that support the credit.
Do I need to fill lines 4‑6?
They are reserved for future use Leave them blank
Which credit rate should I use?
Instructions list $0.79 for 2025 after inflation adjustment Confirm $0.79 on line 2
Can I report the credit on Form 3800 instead?
Only if no amounts are entered on earlier lines of Form 8904 Verify lines 1‑3 are empty before using Form 3800
Do I have to attach the Schedule K‑1?
The form requires the data but not the attachment Ensure K‑1 data is entered correctly
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