Refundable Clean Heating Fuel Tax Credit (Personal)

The state of New York began offering a personal income tax credit for biodiesel purchases used for residential space heating and water heating beginning in 2006. The original credit was authorized for only one year from July 1, 2006 to June 30, 2007. However, in 2008 the law was amended to reinstate the credit for purchases made between January 1, 2008 and December 31, 2011. At this point it expired, but was extended again in July 2012 through the end of 2016. Eligible taxpayers are defined as individuals; members of a partnership or an LLC treated as a partnership for tax purposes; shareholders in New York S Corporations; and beneficiaries of an estate or trust.

The value of the tax credit is $0.01/gallon for each percent of biodiesel blended with conventional home heating oil, up to a maximum of $0.20/ gallon. In other words, the purchaser of a mixture of 10% biodiesel and 90% conventional heating oil is entitled to a tax credit of $0.10/gallon. Biodiesel is defined to include certain fuels created from both animal fats and vegetable oils. Biodiesel use in buildings with both residential and non-residential space and a common oil storage tank is eligible for a partial credit based on the percentage of square footage used for residential purposes. If a taxpayer's allowable credit exceeds their tax liability for a given year, the remaining credit is refunded rather than carried over to a subsequent tax year.

In order to claim the tax credit personal income taxpayers must complete Form IT-241 (2014), which is available on the New York State Department of Taxation and Finance web site.