Bio-Heating Oil Tax Credit

The credit allows an individual or corporation to claim a credit for each gallon of heating oil blended with biodiesel purchased for space or water heating. For any tax year, the credit allowed under this section may not exceed $500, or the state income tax for that tax year.

The credit is available for the tax years beginning after December 31, 2007, but before January 1, 2018 and remains effective for 10 years, at the end of June 30, 2018

Sole proprietorships, corporations and pass through entities, such as partnerships, subchapter S corporations, limited liability companies and business trusts may claim the tax credit.

To qualify for the credit:

The statute provides a tax credit for individuals and corporations that purchase bio-heating oil for the purpose of space and water heating. Bio-heating oil means heating oil that contains at least 5% biodiesel and is:

How the credit is calculated:

A business that receives an initial credit certificate from the Maryland Energy Administration (MEA) may claim a credit against the state income tax for a tax year in an amount equal to three cents for each gallon of bio–heating oil purchased for space or water heating.

If the credit is more than the tax liability, the unused credit may not be carried forward to any future tax years.

Documentation required:

A copy of the certification issued by the Maryland Energy Administration must be submitted with Form 500CR , Maryland Business Income tax Credits.

Corporate income tax:

Form 500CR must be completed and submitted with the amended income tax return (Form 500X) along with the final certificate issued by the Maryland Department of Business and Economic Development.

Personal income tax:

Form 500CR must be completed and submitted with the income tax return, Form 502, Maryland Resident Income Tax Return.

If the business is a pass-through entity, Form 500CR must be prepared for the pass-through entity and submitted with the entity's income tax return, Form 510, Maryland Pass-Through Entity Income Tax Return in addition to the Form 510 Schedule K-1 separately stating their share of the credit.

Contact:

Maryland Energy Administration
60 West Street, Suite 300
Annapolis, MD 21401
Phone: 410-260-7207
E-mail: crice@energy.state.md.us