New York State Residential Fuel Oil Storage Tank Credit

Effective January 1, 2001, through March 31, 2002, section 606(p-1) of the New York State Tax Law allows a credit against your personal income tax for the cost of removal, and the cost of permanent closure of an unprotected residential fuel oil storage tank, and the installation costs of a new residential fuel oil storage tank used to provide heating fuel for qualified residential property located in New York State. To claim this credit, you must have incurred the cost of tank removal, permanent closure, or replacement.

Effective April 1, 2002, section 606(p-1) of the Tax Law was amended. If you remove or close a residential fuel oil storage tank after March 31, 2002, but before January 1, 2004, a credit will be allowed only if a new residential fuel oil storage tank is purchasedand installed to replace the tank that was removed or permanently closed. The new tank must be used to provide heating fuel for qualified residential property located in New York State. The credit will be allowed for the year in which the replacement tank is installed. To claim this credit, you must have incurred the cost of tank removal or permanent closure and replacement.

Note: Tax year 2003 is the last year you can make a new claim for the residential fuel oil storage tank credit for the removal or permanent closure of an unprotected residential fuel oil storage tank and the purchase and installation of a replacement tank. However, any unused credit from a prior year in which the credit was allowed can be carried over to tax years after 2003.

The credit is available to individuals, partners in a partnership (including members of LLCs that are treated as partnerships for federal tax purposes), estates and trusts, and beneficiaries of estates and trusts.

Residential fuel oil storage tank means a tank used to supply heating fuel to qualified residential property. It also includes a tank used to supply heating fuel to qualified residential property where a portion of the residence is used for commercial purposes.

Qualified residential property means a one-family, two-family, three-family, or four-family residence located in New York State.

For tanks removed or permanently closed before April 1, 2002, the residential fuel oil storage tank credit is equal to the cost to purchase and install a new residential fuel oil storage tank in tax year 2003, provided the new tank is used in place of a formerly used and unprotected residential fuel oil storage tank that was removed or permanently closed on or after January 1, 2002, but before April 1, 2002, not to exceed $250.

For tanks removed or permanently closed after March 31, 2002, (and replaced after December 31, 2002, but before January 1, 2004), the residential fuel oil storage tank credit will be the total cost of tank removal or permanent closure and replacement, or $500, whichever is less.

Your local fire and building inspector, heating oil supplier, or contractors dealing with heating oil tanks should be able to provide you with information regarding the procedures for tank removal, closure, and replacement in your area.  

The residential fuel oil storage tank credit is not refundable.  However, any amount of credit or carryover of credit not deductible in the current tax year may be carried over to be deducted for the following year or years.

To claim this credit, you must complete Form IT-254, Claim for Residential Fuel Oil Storage Tank Credit, and attach it to your Form IT-201, IT-203, IT-204, or IT-205.

For more information, see Publication 64-W, FAQs: Residential Fuel Oil Storage Tank Credit.