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Common questions on Form 8904, Marginal Well Production Credit in Lacerte

SOLVEDby IntuitUpdated 1 week ago

Common questions on Form 8904, Credit for Oil and Gas Production From Marginal Wells, in Lacerte for Tax year 2022 and prior.

What's new for tax year 2023: For Tax year 2023, Form 8904 has been phased out. See more here.

Table of contents:

Where does the Marginal Well Production Credit flow on my client's return?
Where do I enter line 1 for qualified natural gas production (thousands of cubic feet)?
Where do I enter line 7 credit for oil and gas production from marginal wells from partnerships and S corporations?

Where does the Marginal Well Production Credit flow on my client's return?

For tax years 2022 and prior: Lacerte will carry the credit from Form 8904 to Form 3800, General Business Credits, where the allowable amount of credit for the current year may be limited. If any or all of the credit isn't allowed this year, you can verify on the General Info form that the credit will carryover to next year's return.

For tax year 2023, Form 3800 is undergoing a major IRS rewrite that expands the form to 8 pages. This form is still in development, pending a future release. Form 1120S and 1065 filers that require Form 3800 may want to consider filing extensions.

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Where do I enter line 1 for qualified natural gas production (thousands of cubic feet)?

  1. Go to Screen 34, General Business & Vehicle Credits.
  2. Scroll down to the Credit for Oil and Gas Production from Marginal Wells (8904) section.
  3. Enter the Qualified natural gas production (thousands of cubic feet) field.

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Where do I enter line 7 credit for oil and gas production from marginal wells from partnerships and S corporations?

  1. Go to Screen 34, General Business & Vehicle Credits.
  2. Scroll down to the Credit for Oil and Gas Production from Marginal Wells (8904) section.
  3. Enter the Credit amount per thousands of cubic feet (defaults to 0.67) [O] field.

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