Hybrid vehicle tax credit
From Wikicpa
The Energy Tax Incentives Act of 2005 provided a new credit for hybrid motor vehicles effective beginning in 2006 <IRC Sec. 308(d)>. The credit is available for purchased new vehicles put into use in 2006 and beyond. It does not apply to leased or used vehicles. The credit is for hybrid cars and trucks with gross vehicle weight ratings of less than $8,501 pounds. It is comprised of two parts:
- A fuel economy credit which ranges between $400 and $2,400. This amount is based on fuel-efficiency improvements compared to 2002 year vehicles and
- A conservation credit which can range between $250 and $1,000. This amount is based on expected fuel consumption reductions over the life of the vehicle.
So the minimum credit amount for qualifiying cars is $650 ($400 + $250) and the maximum is $3,400 ($2,400 + $1,000)
| Vehicle | Year | Certified Credit Amount |
|---|---|---|
| Ford Escape Hybrid Front WD | 2006 | $2,600 |
| Ford Escape Hybrid 4WD | 2006 | $1,950 |
| Honda Insight CVT | 2005, 2006 | $1,450 |
| Honda Civic Hybrid MT and CVT | 2005 | $1,700 |
| Honda Civic Hybrid CVT | 2006 | $2,100 |
| Honda Accord Hybrid AT and Navi AT | 2005 | $650 |
| LexusGS45Ott | 2007 | $1,550 |
| Lexus RX 400h 2WD and 4WD | 2006 | $2,200 |
| Mercury Mariner Hybrid 4WD | 2006 | $1,950 |
| Toyota Camry Hybrid | 2007 | $2,600 |
| Toyota Highlander Hybrid 2WD and 4WD | 2006 | $2,600 |
| Toyota Prius | 2005, 2006 | $3,150 |
Credit Phaseout
The credit will be phased out over four calendar quarters starting with the second calendar quarter following the post-2005 calendar quarter during which the manufacturer first sells a cumulative total of at least 60,000 qualifying vehicles for use in the United States <IRC Sec. 308(f)>. Taxpayers may claim the full amount of the allowable credit for purchases made through the end of the first calendar quarter after the quarter in which the manufacturer records its sale of the 60,000th vehicle. For purchases made during the second and third calendar quarters after the quarter in which the 60,000th vehicle is sold, taxpayers may claim 50% of the credit. For purchases made during the fourth and fifth calendar quarters, taxpayers may claim 25% of the credit. No credit is allowed for purchases made after the fifth quarter.
References
Internal Revenue Code Section 30B
