Tax Credits Available For 14 Hybrid Vehicles
by Jenny McLane
The U.S. government has expressed its concern for global warming and has enacted laws to support the initiative by car makers in producing environment friendly vehicles. In 2005, the legislation Energy Policy Act was passed into law. This law stated that owners of certain environment friendly vehicles are entitled to tax credits.
"Prospective car buyers need to ask dealers to find out whether the car they will be buying is still eligible for tax credits"
This is a very conscious effort to promote the use of such eco-friendly vehicles. You see, car buyers are entitled to these tax credits if they buy either a fuel cell vehicle, an advance lean burn technology equipped vehicle, or a hybrid or alternative fuel vehicle. Currently, hybrids are the only vehicles available to the public and there is only one fuel-cell vehicle in the United States. The Honda Civic GX was just leased to companies but may take many more years before made available to the general public.
Recently, Cars.com came out with the fourteen vehicles which are currently eligible for tax credits. The policy states that when a certain manufacturer sells 60,000 units of tax credit eligible cars, the tax credit scheme will start to be phased out. This means that prospective car buyers need to ask dealers to find out whether the car they will be buying is still eligible for tax credits or how many percent of the original tax credit will be made available for them.
So far, the only car manufacturer that has reached the 60,000 mark is Toyota and this is by virtue of the fast selling Toyota Prius. Honda and other car makers are expected to follow suit.
Every four months, after a car manufacturer reaches the 60,000 mark, the tax credit will be cut down by half until the government will no longer provide tax credits for green vehicles. These tax credits will support car buyers when paying off the tax for their purchased vehicle.
Did your vehicle make the cut? Take a look below to see.
2006-07 Silverado Hybrid: $250 (2WD) or $650 (4WD)
2005-07 Escape Hybrid: $2,600 (FWD) or $1,950 (AWD)
2008 Escape Hybrid: $3,000 (FWD or AWD)
2006-07 Sierra Hybrid: $250 (2WD) or $650 (4WD)
2005 Accord Hybrid: $650
2006-07 Accord Hybrid: $1,300*
2005 Civic Hybrid: $1,700
2006-07 Civic Hybrid: $2,100
2007 Civic GX: $4,000**
2005-06 Insight: $1,450
2007 GS 450h: $1,550***
2006-07 RX 400h: $2,200*** (FWD and AWD)
2006-07 Mariner Hybrid: $1,950 (AWD only)
2008 Mariner Hybrid: $2,200 (FWD and AWD)
2007 Altima Hybrid: $2,350 Toyota
2007 Camry Hybrid: $2,600***
2006-07 Highlander Hybrid: $2,600*** (FWD and AWD)
2005-07 Prius: $3,150***
*2006 Accord without updated engine calibration eligible for $650 credit.
**Natural-gas powered Civic GX available in California and New York.
***Cars purchased by Sept. 30, 2006, earn the full credit. Those purchased from Oct. 1, 2006, through the end of the year earn 50 percent of the credit.
|A Note from the IRS...
Tax season is upon us and Americans' are looking for new deductions in order to maximize this year's tax return. Tax payers are allowed a tax credit for certain hybrid vehicles purchased and put in use after 12/31/05 and before 12/31/10. This tax credit is referred to as The Energy Policy Act of 2005 and replaced the clean fuel burning deduction.
Full credits are only available for a limited amount of time after purchase of the hybrid vehicle. The credit should be submitted before the end of the second quarter after the quarter the manufacturer sells its 60,000th of that particular model. Basically, a full credit is only available for a limited time after purchase, after that point, the credit goes down to 50% after the third quarter and then down to 25% after the fourth quarter. No credit is allowed after the fifth quarter after the 60,000th sold. A credit is only available for the original purchaser of the vehicle--this is a one time credit. This tax credit depends on the make and year of the vehicle, a full list of vehicles and credits available is accessible on www.irs.com.
"To utilize this credit, tax payers should refer to the hybrid automobile make and model list. This information is easily accessible and updated on irs.com," states IRS.com representative Robert Hoult. The tax credit may be anywhere between $400 to $3400 depending on the make and year. Tax payers are required to fill out the full version of Form 1040.
About the Author:
Jenny McLane is a 36 year old native of Iowa and has a knack for research on cars and anything and everything about it. She works full time as a Market Analyst for one of the leading car parts suppliers in the country today. You can visit Monroe shocks for more information.
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