Utilities, Energy & Communications · Surprise rank #277
Heat With Oil in New York? You May Be Owed Up to 20 Cents Back Per Gallon
If your home heating oil is a biodiesel blend — and most New York heating oil now is — New York owes you a refundable tax credit of up to 20 cents per gallon. On 1,000 gallons of B20 that is $200 cash back.
Who
New York residents who buy bioheating fuel for residential heating or hot water, including owners and residents of single-family homes, multi-family homes, apartment buildings, co-ops and condos. Businesses buying qualifying residential heating fuel can claim it too.
Where: Statewide New York, including NYC, Nassau and Suffolk — anywhere heating oil is delivered for residential use.
What to do
Start here: Ask your heating oil dealer what biodiesel blend they deliver — the percentage appears after the letter B on your invoice. Keep every invoice showing purchase date, gallons and blend percentage, then file Form IT-241 with your New York return (Form CT-241 for corporations).
Eligibility: The fuel must contain at least 6% biodiesel per gallon (designated B6 or higher) and be used for residential space heating or hot water within New York State. Renewable hydrocarbon diesel blended with conventional heating oil may also qualify. The credit applies to fuel purchased before January 1, 2029.
What you get
The clean heating fuel credit is a refundable New York State credit for bioheating fuel used for space heating or hot water in a home in New York. The credit is one cent per gallon for each percentage point of biodiesel in the blend, capped at 20 cents per gallon. Because it is refundable, you get the money even if you owe no state income tax — you can take it as a refund or apply it to next year's tax.
Benefit: One cent per gallon for each percent of biodiesel, up to 20 cents per gallon, as a refundable credit. Buy 250 gallons of B20 and the credit is $50; buy 1,000 gallons of B20 and it is $200.
Possible value: A typical New York household using 800 to 1,000 gallons of heating oil a season would get roughly $48 to $200 back a year depending on the blend percentage — more with B20, less with B6. Multi-family and larger buildings can claim considerably more.
Good to know
Important: You need documentation. Invoices must show the date, the number of gallons and the biodiesel percentage — if your dealer's receipts do not state the blend, ask them to. A 5% blend (B5) is standard in much of New York and does not qualify; you need B6 or higher. If several taxpayers shared the fuel purchase for one property, each claims only their share and must attach a statement. Note that some copies of the state's own guidance still list an expiration of January 1, 2026; the current Tax Department page states the credit runs through purchases made before January 1, 2029.
Availability: Active for fuel purchased before January 1, 2029. Refundable, so it pays out even with no tax liability.
Why people miss it: Almost nobody knows what blend their oil dealer delivers, and the credit is claimed on a form most tax preparers never open unless the customer raises it.
Sources reviewed: Aug 10, 2026