Refundable Clean Heating Fuel Tax Credit (Personal)
Administered by New York State Department of Taxation and Finance
You can claim a New York refundable tax credit of $0.01 per gallon for each percent of biodiesel blended into your residential heating oil, up to a maximum of $0.20 per gallon—for example, B10 fuel earns you $0.10 per gallon. Fuel purchased on or after January 1, 2017 must contain at least 6% biodiesel to qualify, and any credit exceeding your tax liability is refunded to you rather than carried forward. To claim the credit, file Form IT-241 with the New York Department of Taxation and Finance and keep documentation of your bioheating fuel purchases.
This refundable credit gives your residential customers direct savings on bioheating fuel bills when they blend biodiesel with conventional heating oil—the credit applies automatically when they file their state taxes on Form IT-241. You can help customers understand that fuel must meet the 6% biodiesel minimum (for fuel purchased after January 1, 2017) and that they need to retain receipts showing the biodiesel blend percentage to substantiate their claim during any audit.
New York's refundable biodiesel credit provides $0.01 per gallon per biodiesel percentage point (capped at $0.20/gallon) for residential space and water heating fuel purchased before January 1, 2029. The program is self-administered through personal income tax returns (Form IT-241) and corporate returns (Form CT-241); refunds are issued when credits exceed tax liability. Eligible taxpayers include individuals, partnership members, S-corporation shareholders, and estate/trust beneficiaries; fuel must contain at least 6% biodiesel for purchases after January 1, 2017. Recordkeeping requirements are enforced through audit procedures to verify purchase documentation.
Program details
- Program ID
- 3203
- Effective
- 1/1/2008
- Expires
- 1/1/2026Expired
- Last updated
- 4/14/2026
Eligibility
- Sectors
- residential low income residential
- Technologies
- biomass
Program summary
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. The credit is equal to one cent for each percent of biodiesel per gallon of bioheating fuel purchased before January 1, 2026. It may not exceed 20 cents per gallon. 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. However, after January 1, 2017, the credit will not apply to fuel that is less than 6% biodiesel per gallon. Biodiesel is defined to include certain fuels created from both animal fats and vegetable oils. 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. Interested corporations must complete Form CT-241. Both forms are available on the New York State Department of Taxation and Finance web site.
Contact & resources
- Additional resources
Please verify current program details with the administering agency before making any financial decisions.
