Transportation & Fuel Source Technology
Cars.com Offers Tax Guidance for Hybrid/Alternative-Fuel Car Owners
Hybrid and alternative-fuel vehicles are well-known for their green credentials, but they can also save you money on your taxes. Cars.com
has taken the guesswork out of tax credits
for green vehicle buyers by offering consumers information about cars that
qualify for a credit and explaining how and when credits for popular hybrid
vehicles are expected to be phased out.
Thanks to the Energy Policy Act of 2005, certain cars purchased in 2006
can earn credits of up to $4,000 and there is still time for buyers to take
advantage of these credits in their 2006 filing. To be eligible for the
credits, vehicles have to fall into one of four categories: fuel cell,
advance lean burn technology, hybrid or alternative fuel. Currently, the
only mass- market cars that qualify are hybrids and one natural-gas-powered
car, the Honda Civic GX.
The IRS offers credits on a total of 14 cars, ranging from $250 to
$4,000. Here is a list of those cars and their corresponding credits:
- 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
- 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.
"For some cars, the amount you can claim depends on exactly when you
bought the car," said Cars.com managing editor Patrick Olsen. "That's
because federal rules say that when a manufacturer sells 60,000 of its
eligible cars -- as reported to the government each quarter -- the credits
will start to be phased out."
The counter began ticking on Jan. 1, 2006. So far, Toyota is the only
automaker to have reached the mark, selling its 60,000th hybrid car in the
summer of 2006. As stipulated by the Energy Policy Act of 2005, consumers
who purchased a Toyota or Lexus hybrid after Oct. 1, 2006, can claim 50
percent of the credit on their 2006 taxes -- for example, $1,575 on a Prius
instead of the original $3,150. The IRS phases out the credits in 50, 25
and zero percent steps over the course of a year. Toyota credits, for
example, will fall to just 25 percent of the original amount starting April
1, 2007. Honda is expected to exceed the 60,000 mark this year, and other
automakers will likely follow.
Under current legislation, the 60,000 quota is not scheduled to be
"There is still an opportunity for car buyers in the market today to
earn credits on their 2007 taxes. For those seriously considering
alternative fuel models, we recommend that they check with each
manufacturer as some of the credits on more popular alternative fuel
vehicles will be changing," added Olsen.
More Transportation & Fuel Source Technology Articles
Stanford researchers seek 'Holy Grail' in battery design
Volvo Car Group Makes Conventional Batteries a Thing of the Past
Tesla Model S Achieves Best Safety Rating of Any Car Ever Tested in the U.S.
Pure Electric BMW i3 Premieres in New York, London and Beijing
Smith Electric Vehicles to Open Manufacturing Facility In Chicago
BMW and Toyota Partner to Develop Fuel Cells
Tesla Motors Secretly Develops Solar Powered EV Charging Station Network
Quantum Demonstrates Plug-In Hybrid Electric F-150 Pick-Up Truck
NASA Goes Green: NASA Selects Green Propellant Technology Demonstration Mission
Increase in Popularity of Alternative Transportation Leads to Decrease in Oil Usage
even more articles...
Suggest an Article for Green Progress