Instructions For Form It-254 - Claim For Residential Fuel Oil Storage Tank Credit printable pdf download

New York State Department of Taxation and Finance

IT-254-I

Instructions for Form IT-254

Claim for Residential Fuel Oil Storage Tank Credit

(Personal Income Tax)

Your local fire and building inspector, heating oil supplier, or

General information

contractor dealing with heating oil tanks should be able to provide

Section 606(p-1) of the New York State Tax Law allows a credit to

you with additional information regarding the procedures for tank

eligible taxpayers for the cost of removal and the cost of permanent

removal, closure, and replacement in your area.

closure of an unprotected residential fuel oil storage tank, and the

Amount of credit

purchase and installation costs of a new residential fuel oil storage

tank used to provide heating fuel for qualified residential property

The residential fuel oil storage tank credit is equal to the sum of:

located in the state of New York. To claim the credit, you must have

(1) the costs of removal of an existing unprotected residential

incurred the cost of tank removal, closure, or replacement.

fuel oil storage tank, not to exceed $250, plus

The credit only applies to tax years beginning in 2001 and 2002.

(2) the cost of permanently closing an existing unprotected

The credit is not refundable, but any unused credit may be carried

residential fuel oil storage tank, not to exceed $250, plus

forward to future years (including tax years after 2002). For more

(3) the costs to purchase and install a new residential fuel oil

information on this credit, see Publication 64, FAQs: Residential

storage tank, provided the new tank is used in place of a

Fuel Oil Storage Tank Credit.

formerly used unprotected residential fuel oil storage tank

Who is eligible

that was removed or permanently closed during the tax

year or the immediately preceding tax year, not to exceed

• Individuals, estates, and trusts,

$250.

• Partners in a partnership, including members of an LLC that is

Example: On January 10, 2001, you had an unprotected residential

treated as a partnership for federal income tax purposes,

fuel oil storage tank removed from qualified residential property. A

• Beneficiaries of an estate or trust.

new tank was installed on January 11, 2001, to replace the tank

that was removed. You would be allowed a credit for the costs (up

Who must file

to $250) for the removal of the unprotected tank, and a credit for

the costs (up to $250) for the purchase and installation of the new

File Form IT-254 if you are an individual, a partnership, or an

tank.

estate or trust and you qualify for the credit. In addition, if you are a

partner in a partnership (including members of an LLC treated as a

You may claim a credit for the cost of (1), (2), and (3) only once for

partnership for federal income tax purposes), or a beneficiary of an

a particular residence. Accordingly, the total amount of credit you

estate or trust, file Form IT-254 to claim your share of the credit

may claim for a particular residence is $750.

from your entity.

Special rules

A partnership must file Form IT-254 with Form IT-204, Partnership

Return, showing the partnership’s total credit for the residential fuel

• You cannot claim the credit for the purchase and installation of a

oil storage tank.

new residential fuel oil storage tank unless the new tank is used

in place of an existing unprotected residential fuel oil storage

Definitions

tank that was removed or permanently closed during the tax

year or the preceding tax year. Accordingly, the credit is not

Residential fuel oil storage tank means a tank used to supply

available for a tank installed in a newly constructed residence,

heating fuel to qualified residential property. It also includes a tank

or for a tank that was installed in a residence that was heated

used to supply heating fuel to qualified residential property where a

with another fuel (such as natural gas or propane) immediately

portion of the residence is used for commercial purposes.

prior to the installation of the new tank.

Heating fuel means fuel oil or kerosene. It does not include

However, if an existing tank was removed or closed in 2000, but

propane, natural gas, or gasoline.

the tank was not replaced until 2001, the credit will be allowed

Qualified residential property means a single family, two-family,

only for the costs (up to $250) of purchase and installation of the

three-family, or four-family residence located in New York State.

new tank.

Unprotected tank means a bare steel tank that does not have

Example: On December 29, 2000, you permanently closed an

provisions to prevent corrosion (such as a double wall or cathodic

unprotected residential fuel oil storage tank located on qualified

protection).

residential property. A new tank was installed on January 2,

2001, to replace the tank that was closed in December. You

Permanently closing a residential fuel oil storage tank means the

would be allowed a credit for the costs (up to $250) for the

tank has been left in place but has been permanently taken out of

purchase and installation of the new residential fuel oil storage

service in compliance with all state and local laws and codes.

tank that occurred in tax year 2001. You cannot claim any credit

Removal of a residential fuel oil storage tank means the tank has

for the costs of the permanent closure of the unprotected tank

been removed from the property in compliance with all state and

since the tax credit was not in effect for tax year 2000.

local laws and codes.

• You may claim the credit for removal or permanent closure of an

Costs include all costs associated with the removal or permanent

existing unprotected residential fuel oil storage tank even if you

closure of an existing unprotected tank and the purchase and

do not replace it with a new tank.

installation of a new tank, including but not limited to, costs for

Example: On September 11, 2001, you had an unprotected

labor and materials, cleanup costs if a leak is found, and

residential fuel oil storage tank removed from your qualified

excavation costs necessary to remove an existing tank or install a

residential property and converted the residence to natural gas

new tank and return the land to its original state. Costs do not

heat. You may claim the credit for the costs (up to $250) for the

include the costs necessary to hook up the qualified property to an

removal of the tank. However, you cannot claim the credit for

alternative fuel (such as natural gas) after the removal or closure of

any part of the costs for the conversion to natural gas.

an existing tank. Furthermore, costs do not include financing or

interest charges.

• You can claim the credit for the purchase and installation of a

new tank even if the new tank is not installed in the same

A new residential fuel oil storage tank means a new tank that has

manner as the old tank.

been installed in conformance with all state and local laws and

codes and manufacturers’ directions.

Instructions For Form It-254 - Claim For Residential Fuel Oil Storage Tank Credit

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