Tax Update Blog: Permalink

« Previous · Tax Update Blog Home · Next »

HYBRID HURRY

June 08, 2006

One strange aspect of the new federal tax credit for hybrid cars is that the full credit is available only in the calendar quarters in which a given manufacturer sells the first 60,000 qualifying vehicles. Based on an IRS release yesterday (IR-2006-91), Lexus and Toyota fans counting on the credit should get their hybrids by the end of this month:

The Quarterly Report of Qualified Vehicles for the Alternative Motor Vehicle Credit for the quarter ending March 31, 2006, shows that Toyota (which owns Lexus) sold 41,779 qualifying vehicles to retail dealers.

The make, model year and the corresponding allowable credit for qualified vehicles sold in the quarter are:

• Toyota Prius, 2005 and 2006 — $3,150
• Toyota Highlander Hybrid, 2006 — $2,600
• Lexus RX400h Hybrid, 2006 — $2,200

If you want to buy a hybrid without the time pressure, look to Ford and Mercury:

The Quarterly Report of Qualified Vehicles for the Alternative Motor Vehicle Credit for the quarter ending March 31, 2006, shows that Ford (which owns Mercury) sold 6,192 qualifying vehicles to retail dealers.

The make, model year and the corresponding allowable credit for qualified vehicles sold in the quarter are:

• Ford Escape 2WD Hybrid, 2006 — $2,600
• Ford Escape 4WD Hybrid, 2006 — $1,950
• Mercury Mariner 4WD Hybrid, 2006 — $1,950

Keep in mind that this credit doesn't reduce alternative minimum tax (AMT), so make sure that you aren't an AMT victim if you are counting on the credit.

Link:

IRS list of qualifying vehicles

      Bookmark: del.icio.us • Digg • reddit