New Hybrids Added to Tax Break List

Posted on 03. Jun, 2006 by in News, Taxes

hybrid.jpgThe IRS just anounced that several more Hondas have been cleared as qualifying for the Alternative Motor Vehicle Credit. The tax credit for hybrids applies to cars purchased after January 1, 2006 and can pocket you as much as $3,400!

The hybrid vehicle certifications recently acknowledged by the IRS and their credit amounts are:

  • Honda Civic Hybrid CVT Model Year 2006 : $2,100.00
  • Honda Civic Hybrid (SULEV) MT Model Year 2005: $1,700.00
  • Honda Civic Hybrid (SULEV) CVT Model Year 2005: $1,700.00
  • Honda Insight CVT Model Year 2005: $1,450.00
  • Honda Insight CVT Model Year 2006: $1,450.00
  • Honda Accord Hybrid AT Model Year 2006: $1,300.00*
  • Honda Accord Hybrid AT Model Year 2005: $650.00

*2006 Honda Accord Hybrid AT without updated control calibration qualifies for a credit amount of $650.

Starting this year, the tax credit replaces the tax deduction of $2,000, which was previously allowed for taxpayers who purchased a new hybrid vehicle before Dec. 31, 2005. The new tax credit requires a different certification. I posted a partial list here of the previously qualified vehicles.

If you’re looking to take advantage of this hybrid tax credit, you may want to buy sooner rather than later since the full credit is only available for a limited time thanks to a funny rule: You may claim the full amount of the allowable credit up to the end of the first calendar quarter after the quarter in which the manufacturer records its sale of the 60,000th vehicle. For the second and third calendar quarters after the quarter in which the 60,000th vehicle is sold, taxpayers may claim 50 percent of the credit. For the fourth and fifth calendar quarters, taxpayers may claim 25 percent of the credit. Unfortunately, no credit is allowed after the fifth quarter so be sure time your hybrid purchase.

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