tax credit hybrid cars

Hybrid Cars Tax

By: Johan Young

Ever since 2005, the IRS has been giving a tax credit to individual taxpayers who drive cars which use alternative fuel sources. There was at one time just a clean fuel burning deduction available to green minded taxpayers, but this only applied to gas-electric hybrid vehicles. By the terms of this 2005 law, the tax credit is taken directly from the total amount of tax which the taxpayer would otherwise owe.

Qualified vehicles purchased on or after 1st of January, 2006, will be entitled for a tax credit ranging from $400 to $3,400 based on its fuel saving. The hybrid car tax credit is a combination of two different tax credits. The auto manufacturers and the IRS will be responsible to certify the tax credit amount.

The government has qualified diverse makes and models for this hybrid tax credit. Your tax credit may reduce by various limitations.

The IRS dictates that the producer’s certification should have the subsequent 16 essentials: Name, tax identification number of the manufacturer, and address; Make, model year, model, and other identification information; A written statement that the vehicle was made by the manufacturer itself; The kind of credit for which the automobile qualifies; The amount of the tax credit (shows all the computations); The gross weight of the vehicle; The vehicle weight class; The city’s fuel economy of the vehicle; Statement that the vehicle does complies with the provisions provided on the Clean Air Act; A Copy of the certificate that proves that the vehicle meets the emission standards set by the government under the Clean Air Act; A statement that the motor vehicle comply with state’s air quality control law; Statement that the vehicle complies with certain motor vehicle safety provisions; Statement that the motor vehicle uses a hybrid technology both rechargeable energy storage system and an internal combustion; Statement that the motor vehicle meets or exceeds California’s low emissions vehicle standards; proof that the motor vehicle does not go beyond the maximum power standard.

Let’s have a look at how large of a credit you will be eligible to receive for your hybrid vehicle. This information is current as of January 2009: (http://www.hybridcars.com/federal-incentives.html)

1.    Make: Chevrolet

Model: Malibu Hybrid, Amount of Credit: $1,300

Model: Tahoe Hybrid and Silverado Hybrid, Amount of Credit: $2,200

2.    Make: Ford

Model: Escape Hybrid 2WD, Amount of Credit: $3,000*

Model: Escape Hybrid 4WD, Amount of Credit: $2,200*

Model: Fusion Hybrid, Amount of Credit: $3,400

3.    Make: GMC

Model: Yukon Hybrid and Sierra Hybrid, Amount of Credit: $2,200

4.    Make: Honda

Model: Civic CVT, Amount of Credit: $0 to $2,100 depending upon date of purchase.

Model: 2005 Civic Hybrid (auto), Amount of Credit: $1,700

5.    Make: Mazda

Model: Tribute 2WD, Amount of Credit: $3,000

Model: Tribute 4WD, Amount of Credit: $2,200

6. Make: Mercury

Model: Mariner Hybrid 2WD, Amount of Credit: $3,000

Model:  Mariner Hybrid 4WD, Amount of Credit: $2,200

Model: Milan Hybrid, Amount of Credit:3,400

7. Make: Nissan

Model: Altima Hybrid, Amount of Credit: $2,350

8. Make: Saturn

Model: Aura Green Line, Amount of Credit: $1,300

Model: Vue Green Line, Amount of Credit: $650

9. Make: Toyota

Model: Camry Hybrid, Amount of Credit: $2,600*

Model: Prius, Amount of Credit: $3,150*

Model: Highlander Hybrid, Amount of Credit: $0 to $2,600*

10. Make: Lexus

Model: GS 450h, Amount of Credit: $1,550*

Model: RX 400h 2WD and 4WD, Amount of Credit: $2,200*

Model: LS 600hL Hybrid, Amount of Credit: $450*

*Credits for Toyota and Honda hybrids no longer quality at all for tax credits. Ford hybrids are still eligible, but the credits will be cut in half from amounts listed below starting April 1, 2009. In October 200, the credits will be cut in half agaim, and will completely phase out on April 1, 2010