Refundable Clean Heating Fuel Tax Credit (Corporate)

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 and then to 2026. 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.