What you need to know about the tax credit for hybrids
Last night, I saw for the first time an ad by Toyota on the new tax credit available for buyers of hybrid vehicles. There are many things y...
https://iskablogs.blogspot.com/2006/01/what-you-need-to-know-about-tax-credit.html
Last night, I saw for the first time an ad by Toyota on the new tax credit available for buyers of hybrid vehicles. There are many things you need to know about qualifying for that big tax credit on your new hybrid vehicle.
1) Purchase your hybrid car in 2006
2) Used hybrids don't count, they have to be new
3) It must be for your own personal or business use. In other words, you can't just turn around and sell it (see 4).
4) There is a 'recapture' for selling your hybrid car early. If you get a tax credit for buying a new hybrid, you can't just turn it around and sell it. You will need to keep the car for a certain time period (although that time period hasn't been established, yet). If you do, some of the credit will need to be 'recaptured' (i.e. a penalty).
5) If you are eligible for other tax credits, keep in mind the hybrid tax credit may be taken after those others. These include Child and dependent care, electric vehicle, mortgage, etc... Talk to a tax expert for further details on this one.
6) The tax credit is allowable the end of the first calendar quarter after the quarter in which the manufacturer records its sale of the 60,000th hybrid and advanced lean-burn technology motor vehicle. Note that this means Toyota will run out of tax credits quickly. This rule is being seen as an incentive for domestic car makers, as they won't run out of the eligible vehicles as quickly.
Want to know more? The IRS released a notice on the process that manufacturers can use to certify the amount of credit the purchaser of a hybrid or lean burn vehicle can claim. That process document is a 14 page pdf file.
1) Purchase your hybrid car in 2006
2) Used hybrids don't count, they have to be new
3) It must be for your own personal or business use. In other words, you can't just turn around and sell it (see 4).
4) There is a 'recapture' for selling your hybrid car early. If you get a tax credit for buying a new hybrid, you can't just turn it around and sell it. You will need to keep the car for a certain time period (although that time period hasn't been established, yet). If you do, some of the credit will need to be 'recaptured' (i.e. a penalty).
5) If you are eligible for other tax credits, keep in mind the hybrid tax credit may be taken after those others. These include Child and dependent care, electric vehicle, mortgage, etc... Talk to a tax expert for further details on this one.
6) The tax credit is allowable the end of the first calendar quarter after the quarter in which the manufacturer records its sale of the 60,000th hybrid and advanced lean-burn technology motor vehicle. Note that this means Toyota will run out of tax credits quickly. This rule is being seen as an incentive for domestic car makers, as they won't run out of the eligible vehicles as quickly.
Want to know more? The IRS released a notice on the process that manufacturers can use to certify the amount of credit the purchaser of a hybrid or lean burn vehicle can claim. That process document is a 14 page pdf file.
