Will I receive Tax Credit for my Hybrid Car and How Much Will It Be?

“Green” technology has started governments giving tax credits to individuals and companies who implement this form of technology in their lives and businesses.  There has been a clean fuel burning tax deduction since before 2005 this applied only to hybrid vehicles that were gas/electric.  But in 2005 this was replaced with the Energy Policy Act.

What this act meant was, a tax credit was subtracted directly from the total amount of Federal tax that a taxpayer owed, as so reduced or in some cases eliminated the tax obligation for the taxpayer.  If you are confused as to whether your vehicle is eligible and qualifies for this tax credit you can obtain additional information form the car manufacturer or your local dealer.

This below is from the US Department of Energy website
http://www.doe.gov/taxbreaks.htm

This relates to tax credits for automoblies, there are many more tax credits for helping out as far as energy goes but this will tell you how you can qualify.

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Automobile Tax Credits

Individuals and businesses who buy or lease a new hybrid gas-electric car or truck are eligible for, and can receive, an income tax credit of $250-$3,400 – depending on the fuel economy and the weight of the vehicle.   Hybrid vehicles that use less gasoline than the average vehicle of similar weight and that meet an emissions standard qualify for the credit.   “Lean-burn” diesel vehicles could also qualify, but currently available diesel vehicles do not meet the emissions standard.  There is a similar credit for alternative-fuel vehicles and for fuel-cell vehicles.

If individuals and businesses buy more than one vehicle, they are eligible to receive a tax credit for each.  If a tax-exempt organization buys such a vehicle, the retailer is also eligible to receive another credit.  Companies that buy heavy-duty hybrid trucks are also eligible for a larger tax credit.  Currently, there is a $2,000 tax deduction for hybrid vehicles for the remainder of 2005.

This tax credit is for vehicles “placed in service” beginning January 1, 2006, but because there is a waiting list for many hybrids, consumers can receive the tax credit if they arrange to purchase the vehicle this year as long as they do not take possession of the vehicle until January 1, 2006.  This tax credit will be phased out for each manufacturer once that company has sold 60,000 eligible vehicles.  At that point, the tax credit for each company’s vehicles will be gradually reduced over the course of another year.

About Tax Credits

A tax credit is generally more valuable than an equivalent tax deduction because a tax credit reduces tax dollar-for-dollar, while a deduction only removes a percentage of the tax that is owed.  Beginning in tax year 2006, consumers will be able to itemize purchases on their federal income tax form, which will lower the total amount of tax they owe the government.

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What is a hybrid vehcile?

The following is from Wikipedia

“A hybrid electric vehicle (HEV) is a vehicle which combines a conventional propulsion system with an on-board rechargeable energy storage system (RESS) to achieve better fuel economy than a conventional vehicle without being hampered by range from a charging unit like a battery electric vehicle (BEV), which uses batteries charged by an external source. The different propulsion power systems may have common subsystems or components.”

It’s important to note here that the credit is only available to the original purchaser of a new, qualifying vehicle. If a qualifying vehicle is leased to a consumer, the leasing company may claim the credit.

As of Janyary 2008, the information below will let you know how much your tax credit will be if you qualify.
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1.    Make: Chevrolet
Model: Malibu Hybrid, Credit Amount $1,300
Model: Tahoe Hybrid 2WD and 4WD, Credit Amount $2,200

2.    Make: Ford
Model: Escape Hybrid 2WD, Credit Amount $3,000
Model: Escape Hybrid 4WD, Credit Amount $2,200

3.    Make: GMC
Model: Yukon Hybrid, Credit Amount $2,200

4.    Make: Honda
Model: Civic CVT, Credit Amount $0 to $2,100 depending upon the purchase date.

5.    Make: Mazda
Model: Tribute 2WD, Credit Amount $3,000
Model: Tribute 4WD, Credit Amount $2,200

6. Make: Mercury
Model: Mariner Hybrid 2WD, Credit Amount $3,000
Model:  Mariner Hybrid 4WD, Credit Amount $2,200

7. Make: Nissan
Model: Altima Hybrid, Credit Amount $2,350

8. Make: Saturn
Model: Aura hybrid, Credit Amount $3,000
Model: Vue Green Line, Credit Amount $1,550

9. Make: Toyota
Model: Camry Hybrid, Credit Amount $0 to $2,600 depending upon purchase date
Model: Prius, Credit Amount $0 to $3,150 depending upon purchase date
Model: Highlander Hybrid 4WD, Credit Amount $0 to $2,600 depending upon purchase date

10. Make: Lexus
Model: RX 400h 2WD and 4WD, Credit Amount $0 to $2,200 depending upon purchase date
Model: LS 600h L Hybrid, Credit Amount $0 to $1,800 depending upon purchase date

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