Rev. December 2018
Form 8904 is a tax form related to claiming a credit for oil and gas production from marginal wells. The form is provided by the Department of the Treasury, Internal Revenue Service. Taxpayers are required to report their qualified natural gas production in thousands of cubic feet and calculate the corresponding credit amount. The credit amount for natural gas production in 2017 was $0.51. Taxpayers need to multiply the natural gas production with the credit amount to find the total credit. The form also includes provisions for credits from partnerships and S corporations, which should be reported on Schedule K or Form 3800 accordingly.
Qualified production includes barrels of oil and barrel-of-oil equivalents (BOE) from a well during the tax year. Production from nonconventional sources is excluded, unless an election is made not to claim the section 45K credit for that well.
To claim the credit, a taxpayer must have an operating interest in the well and file Form 8904. The credit may be claimed only on production which is attributable to the holder of an operating interest.
Form 8904 is used to calculate and claim the qualified production credit for oil and gas produced from marginal wells.
A taxpayer is eligible for the credit if they are a U.S. resident or resident alien, have an interest in an oil or gas well that produces natural gas or oil, and the well meets the definition of a marginal well.
Form 8904 is one of Tax forms that are documents used to report information related to taxes to the relevant tax authority. There are various types of tax forms, including federal, state, and local tax forms, which can vary depending on the taxpayer's circumstances and location.
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