Clean Heating Fuel Credit Available in New York State

The clean heating fuel credit is a refundable credit against the New York State personal income tax and corporate franchise tax. It is available to taxpayers who purchased “bioheat” used for space heating or hot water production for residential purposes in New York State. Bioheat is a fuel comprised of biodiesel blended with conventional home heating oil. Fuel purchased for a residential purpose includes fuel purchased for single and multifamily dwellings.

The credit is available for tax years beginning on or after January 1, 2006, and before January 1, 2017, and applies to bioheat purchased on or after July 1, 2006, but before July 1, 2007, and on or after January 1, 2008, but before January 1, 2017.

The credit is claimed on the tax return for the tax year in which the bioheat was purchased. The credit equals $0.01 per gallon for each percent of biodiesel included in the bioheat, not to exceed $0.20 per gallon. For example, if you have 10% biodiesel in the bioheat fuel you purchase, and you purchase 1,000 gallons, you would receive a credit of $100 (0.10/gallon). 

To determine the amount of biodiesel included in bioheat, examine the underlying invoice. The percentage of biodiesel included in the bioheat is the number preceded by the letter "B" in the bioheat designation. For example, bioheat designated “B5” contains 5% biodiesel, bioheat designated B20 contains 20% biodiesel.

Who is eligible to claim this credit?

  • Individuals
  • Estates or trusts
  • Partners in a partnership (including both corporate and non-corporate partners; also including members of an LLC that is treated as a partnership for federal income tax purposes)
  • Shareholders of a New York S corporation
  • Beneficiaries of an estate or trust
  • Corporations subject to the New York State Corporate Franchise Tax

Personal income tax taxpayers claim this credit by filing Form IT-241, Claim for Clean Heating Fuel Credit with their New York State personal income tax return. If the amount of the credit allowed exceeds the taxpayer's tax for the year, the excess may be credited or refunded without interest.

Article 9-A corporate franchise tax taxpayers must file Form CR-241, Claim for Clean Heating Fuel Credit and attach it to their franchise tax return. The credit allowed for the tax year cannot reduce the tax to an amount less than the tax due on the minimum taxable income base or the fixed dollar minimum, whichever is higher. The taxpayer may seek a credit or refund, without interest, of any portion of the credit not deductible in the current tax year.

For additional information on the clean heating fuel credit, see NYS Form IT-241-I or NYS Form CR-241.