Refundable Clean Heating Fuel Tax Credit (Corporate)
Administered by New York State Department of Taxation and Finance
This program is not available to homeowners; it applies only to corporations and businesses that purchase bioheating fuel for residential heating purposes and claim the credit on their tax returns. If your heating fuel supplier or fuel oil company is a corporation purchasing biodiesel-blended fuel, they may benefit from a refundable tax credit worth $0.01 per gallon per percent of biodiesel blended (up to $0.20/gallon for fuel with at least 6% biodiesel as of January 1, 2017), which could lower fuel costs.
If you supply bioheating fuel to residential customers in New York, inform them that their fuel supplier—if a corporation subject to franchise tax—can claim a refundable state tax credit of $0.01/gallon per percent of biodiesel blended into their heating oil, capped at $0.20/gallon. Fuel must contain at least 6% biodiesel to qualify (effective January 1, 2017), and the supplier must complete Form CT-241 and maintain records proving the biodiesel content and residential heating use; any credit exceeding tax liability is refunded rather than carried forward.
This refundable corporate income tax credit reimburses eligible corporations (subject to the franchise tax on business corporations) for biodiesel-blended heating fuel purchases at $0.01/gallon per percent biodiesel blended, maximum $0.20/gallon, for residential space heating and water heating in New York through December 31, 2028. Fuel must contain at least 6% biodiesel (effective January 1, 2017); biodiesel includes fuels from animal fats and vegetable oils. Excess credits are refunded annually rather than carried over. Claimants file Form CT-241 (corporations) or Form IT-241 (others) and must maintain purchase documentation substantiating biodiesel content and residential use.
Program details
- Program ID
- 4450
- Effective
- 1/1/2008
- Expires
- 1/1/2029
- Last updated
- 4/14/2026
Eligibility
- Sectors
- commercial industrial
- Technologies
- biomass
Program summary
The state of New York began offering a corporate 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 window was extended through December 31, 2016 by A.B. 7793 in October 2011. Afterwards, the window was extended to 2024, 2026, and most recently 2028. Eligible taxpayers are defined as corporations that are subject to the franchise tax on business corporations, including a corporation that is a partner in a partnership.
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 corporate income taxpayers must complete Form CT-241. All other interested parties must complete Form IT-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.
