Buy Those Hybrids Now!

The Internal Revenue Service announced April 7 the tax credit amounts that taxpayers may claim for the purchase of many new hybrid automobiles. The credit replaces the $2,000 tax deduction taxpayers could claim for the purchase of a hybrid before December 31, 2005 under the Energy Policy Act of 2005. However, the full credit is time limited based on the number of vehicles sold by the manufacturers. As the IRS announcement puts it, “Taxpayers 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. No credit is allowed after the fifth quarter.” The IRS certification necessary to qualify for the tax credit has been gained so far only by Toyota and Ford. Here are the tax credit amounts for those vehicles: