If high fuel costs aren’t enough to make you think about buying a new gas-electric hybrid car — this might. I-R-S spokesman Christopher Miller says you could get a tax credit.
The tax credit for hybrid vehicles applies to a gas-electric car you’ve bought since the first of January and it might be as much as 34-hundred dollars. He says so far the highest credit certified so far has been for about 31-hundred-fifty dollars.
Don’t let it confuse you — Miller points out this is not a sales tax break, but a credit on the income tax forms you’ll be working on next spring. And the tax credit up through last year was a tax deduction, instead.
Before January, people who bought hybrid vehicles were allowed a tax deduction, which reduces your taxable income, but a tax credit reduces any tax you owe, dollar-for-dollar, and it may even increase your refund. The Energy Policy Act of 2005 made it more attractive for consumers to take advantage of the hybrid incentive.
Miller says it’s not as difficult as a buyer may think to find a hybrid vehicle and still have the reassurance of a well-known brand name. There are about 21 vehicles so far certified for the credit, including Toyota, Lexus, Ford Mercury and Honda. The credit won’t last forever, and you can check on its availability as well as find out which cars qualify by surfing to the IRS website, where it’s a topic in the center of the front “page.”
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Internal Revenue Service