Hybrid Vehicles
The Energy Policy Act of 2005 replaced the clean-fuel burning deduction with a tax credit. A tax credit is subtracted directly from the total amount of federal tax owed, thus reducing or even eliminating the taxpayer’s tax obligation. The tax credit for hybrid vehicles applies to vehicles purchased or placed in service on or after January 1, 2006.
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.
Hybrid vehicles have drive trains powered by both an internal combustion engine and a rechargeable battery. Many currently available hybrid vehicles may qualify for the tax credit.
These models have been certified for the credit in the following amounts:
†This reflects a decrease in the credit amount as of Oct. 1, 2006, due to the manufacturers meeting quarterly sales of 60,000 qualified hybrid cars -
See Quarterly Sales.
††This credit amount does not phase out. The full amount of the altenative fuel vehicle credit would be available for vehicles purchased on or before December 31, 2010.
Qualified Cars and Credit Amounts
Model Year 2009
Model Year 2008
Model Year 2007
Model Year 2006
Model Year 2005
For detailed information, please review the following IRS guidance and consult your tax advisor:
www.irs.gov/newsroom/article/0,,id=157632,00.html.
*Information provided is for general informational purposes and does not constitute tax advice. For details on the deduction, consumers should check with their tax advisors or the IRS Web site at www.irs.gov.
