Get 20% Back on a Standby Generator
New York’s Investment Tax Credit lets eligible farmers claim 20% of the cost of qualifying equipment used in farm production, including a standby generator that keeps the operation running. You need at least two-thirds of your income from farming, and the unit must be purchased and placed in service in New York on or after April 1, 2022. Unused credit is refundable.
| NY farm ITC at a glance | Details |
|---|---|
| Credit rate | 20% of the equipment’s cost for eligible farmers (4% to 5% for other businesses) |
| Who qualifies | Farmers with at least two-thirds of income from farming |
| Equipment rules | Purchased (new or used), located in NY, principally used in farm production, 4+ year useful life |
| Placed in service | On or after April 1, 2022 |
| Refundable? | Yes, for property placed in service on or after Jan 1, 2023; extended through tax years beginning before Jan 1, 2033 |
| How to claim | Form IT-212 (individuals, partnerships), Form CT-46 (corporations) |
A few hours without power can cost a dairy a day’s milk. On a poultry farm in July, it can cost a lot more than that. Most farmers already know a standby generator is cheap insurance compared to a lost herd or a spoiled crop. What a lot of them don’t know is that New York will pay back up to 20% of the cost.
The state’s Investment Tax Credit gives eligible farmers a credit worth 20% of what they spend on qualifying equipment. A generator that keeps your farm producing through an outage may count. Here’s how the credit works, who qualifies, and what to talk over with your accountant before you buy.
What is New York’s Investment Tax Credit?
New York’s Investment Tax Credit (ITC) is a state tax credit for businesses that buy buildings, machinery or equipment used to produce goods in New York. For most businesses the rate is modest: 5% for C corporations and 4% for S corporations, partnerships and sole proprietors.
Farmers get a much better deal. Since April 2022, an eligible farmer can claim 20% of the cost of qualifying property that’s used in farm production. That’s four to five times the standard rate.
The credit is also refundable for eligible farmers. If your credit is bigger than what you owe in state tax, you can get the unused amount back as a refund on property placed in service on or after January 1, 2023. In June 2026, New York extended that refund option through tax years beginning before January 1, 2033. So it’s worth something even in a year when your tax bill is small.
Who qualifies for the 20% farmer rate?
To get the 20% rate, both you and the equipment have to qualify.
You have to be an eligible farmer. For New York, that means at least two-thirds of your income comes from farming. The state gives worksheets for corporations, S corps, partnerships, sole proprietors and trusts, and you can use a three-year average if one bad year throws off the numbers. Renting your land to someone who farms it can count in some cases. Providing ag services like soil prep or farm labor generally doesn’t.
The equipment has to meet these tests:
- It’s located in New York and principally used in the production of goods by farming.
- It was placed in service on or after April 1, 2022.
- It’s depreciable for federal tax purposes, with a useful life of four years or more.
- You bought it. Leased and rented units don’t qualify.
A commercial standby generator clears the depreciation, useful life and purchase tests without much trouble. The question your accountant will look at is whether it’s principally used in farm production. A generator that powers your milking parlor or your broiler house ventilation makes a much stronger case than one that backs up the farm office.
One more thing: the law says “goods” doesn’t include electricity. A generator used to sell power back to the grid won’t qualify on that basis.
Where backup power protects farm production
The strongest cases are operations where losing power stops production right away.
| Operation | What an outage puts at risk |
|---|---|
| Dairy | Milking schedules, bulk tank cooling, water pumps |
| Poultry and hog barns | Ventilation, heat, feed and water lines |
| Greenhouses and nurseries | Heat, fans, irrigation and lighting |
| Orchards and produce | Cold storage and controlled atmosphere rooms |
| Grain | Dryers, aeration fans and augers during harvest |
New York winters make this a bigger deal than it looks on paper. An ice storm that takes the lines down in January can leave rural farms waiting days for power, and livestock don’t wait.
What the credit could be worth
The credit is 20% of your investment credit base, which is basically what you paid for the equipment. Buy a $100,000 standby system for your dairy and the credit could be as much as $20,000.
A few things can shrink that number. Certain kinds of nonrecourse financing reduce the base. If you sell or stop using the generator for farm production before the end of its useful life, part of the credit can be recaptured. Your accountant will know how these apply to you, and it’s worth asking before the unit’s delivered, not after.
Does used equipment qualify?
It can. The credit is based on property you acquire by purchase, and that includes used equipment as long as you’re not buying it from a related party. For a lot of farms, that’s where the real savings stack up.
A low-hour used industrial generator often costs a fraction of a new one. Put the 20% credit on top of that and backup power that seemed out of reach this year might not be. It’s also a practical option when lead times on new units are long and you want coverage before the next storm season.
Keep your paperwork clean
New York expects you to prove you’re entitled to the credit if you’re ever audited. Hang on to the purchase invoice, the unit’s specs, the delivery and in-service dates, and some record of what the generator powers on your farm. Photos of the install and a simple one-page load list go a long way.
Individuals, partnerships and sole proprietors claim the credit on Form IT-212. Corporations use Form CT-46.
When you buy from Generator Source, we’ll give you an itemized invoice, full unit specs and your delivery date so your accountant has what they need.
Frequently asked questions
Can a farm get a tax credit for a generator in New York? Possibly. New York’s Investment Tax Credit gives eligible farmers 20% of the cost of qualifying equipment principally used in farm production. A standby generator that keeps production running may qualify. Your tax professional makes the final call.
What is the eligible farmer income test? At least two-thirds of your income has to come from farming. You can use a three-year average if a single year falls short.
Is the NYS farm investment tax credit refundable? Yes, for eligible farmers on property placed in service on or after January 1, 2023. Refundability now runs through tax years beginning before January 1, 2033.
Do rented or leased generators qualify? No. The equipment has to be purchased.
What rate do non-farm businesses get? Manufacturers and other producers of goods generally get 4% to 5%. Businesses that don’t produce goods, like offices or data centers, typically don’t qualify at all.
Ready to price a generator for your farm?
Start with a quick call to your accountant to confirm you meet the eligible farmer test. Then figure out what has to keep running when the power goes out. Our generator sizing tool can give you a ballpark, or our sales team can walk through your loads with you.
Generator Source is the largest buyer and seller of new and used industrial generators in North America, with units from 20kW to 4MW+. We own every unit we sell, so you’re dealing directly with the people who have the equipment. Request a quote and we’ll help you find a unit that fits your operation and your budget.
This article is general information, not tax advice. Eligibility and credit amounts depend on your situation. Talk to a qualified tax professional before making a purchase decision.
Sources
- Investment tax credit (ITC), NYS Department of Taxation and Finance
- Investment tax credit: eligible farmers income test, NYS Department of Taxation and Finance
- Article 9-A credit provisions, NYS Department of Taxation and Finance
- NY Tax Law § 210-B, NY State Senate
- New York Extends Certain Tax Increment Financing, Investment Tax Credits, Bloomberg Tax, June 9, 2026