Hybrid Car Tax Credit
What exactly is a Hybrid Car Tax Credit? It’s a specific dollar amount that is subtracted directly from the total amount of your federal tax owed, and it reduces your 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.
Cost incentives also vary state-by-state, so it’s a good idea to check your state’s hybrid incentives.
The following models have been certified for current tax credit:
2008 Hybrid Models & 2008 Tax Credits
* Chevrolet Malibu Hybrid — $1,300
* Ford Escape 2WD Hybrid — $3,000
* Ford Escape 4WD Hybrid — $2,200
* Honda Civic Hybrid — $525 (phasing out to $0 by end of 2008)
* Mazda Tribute 2WD Hybrid — $3,000
* Mazda Tribute 4WD Hybrid — $2,200
* Mercury Mariner 2WD Hybrid — $3,000
* Mercury Mariner 4WD Hybrid — $2,200
* Nissan Altima Hybrid — $2,350
* Saturn Aura Hybrid — $1,300
Hybrid Car Tax Credit Shock
Check out all information and paper work necessary so that you not get a shock when you dont get the Hybrid Car Tax Credit as you may have expected.
**The Type of Hybrid Car you purchased
You should already know that if you bought a Toyota or Lexus hybrid after Oct. 1, 2007, it isn’t eligible for a tax credit. Toyota sold more than 60,000 hybrid vehicles in the United States that were eligible for the full credit by the summer of 2006, so the government began phasing out tax incentives for the company’s hybrids beginning in the fall of that year. By the fall of 2007, the credits were gone.
** How Close you come to having to pay the Alternative Minimum Tax (AMT)?
If you bought a fully credit-eligible hybrid though, you still might still get a much smaller credit than you were expecting. Or none at all.
It has nothing to do with how many hybrid vehicles the carmaker sold. Qualifying for the credit - and how much of it you can take - depends on how close you come to having to pay the Alternative Minimum Tax.
The AMT sets a minimum amount of tax you must pay even if you have deductions that are eligble to allow you to pay less.
The AMT disallows a lot of common deductions that are allowed under the regular code. If the AMT amount is higher, you must pay the AMT.
Here is how it works:
(1) If you tax bill is greater under the AMT than it is under the regular code, so you must pay the AMT an you get no hybrid tax credit.
(2) If your regular taxes, on the other hand, are $3,500 more than what you have to pay under the AMT, and you bought a hybrid car with $3,000 tax credit, you get the full 3,000 tax credit.
(3) However, if your regular taxes, are $1,200 more than what you have to pay under the AMT, and you bought a hybrid car with $3,000 tax credit, you get the tax credit of just $1,800.
