Amount of Tax Credits For Hybrid Cars Announced - Toyota and Ford Hybrids Eligible for Up To $3150 - Limited Time and Number Available

April 10th 2006

Mercury Mariner Hybrid

There are many reasons to buy a hybrid car, including saving money and the environment. Last year the Federal Government offered a tax deduction which made buying a hybrid appealing. This year, the Feds have gone a step further by offering a tax credit. The tax credit is deducted directly from the taxes you owe, not just your total income like a deduction. These credits will likely save the hybrid buyer much more than a deduction would.

Earlier this year most hybrid buyers knew they would get a tax credit, but the exact number was not known. On April 7^th the Internal Revenue Service (IRS) has come up with some figures for Toyota / Lexus and Ford / Mercury hybrid vehicles. Remember, not all hybrids may qualify for the tax credit, but according to the IRS, these models will.

Here is the lineup for Ford Vehicles:

2006 Ford Escape Hybrid Front WD- $2,600

2006 Ford Escape Hybrid 4 WD - $1,950

2006 Mercury Mariner Hybrid 4 WD- $1,950

Here is the lineup for Toyota and Lexus Vehicles:

2005 Toyota Prius - $3150

2006 Toyota Prius - $3150

2006 Toyota Highlander 4WD Hybrid - $2600

2006 Toyota Highlander 2WD Hybrid - $2600

2006 Lexus RX400h 2WD - $2200

2006 Lexus RX400h 4WD - $2200

These tax credits are made available via the Energy Policy Act of 2005. They apply for vehicles purchased after January 1^st, 2006. If you are interested in purchasing a hybrid, the IRS warns that you should “buy early”. There are a limited number of credits available. According to the IRS “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.”