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List of Tax Credits Offered On Hybrid Cars - Prius Lexus Highlander Insight Mariner Civic and Escape Numbers

June 8th 2006

List of Tax Credits Offered On Hybrid Cars - Prius Lexus Highlander Insight Mariner Civic and Escape Numbers

Toyota Prius

If you have a long commute, or drive around town a lot, you should consider a hybrid car.  It is unlikely gas prices will go down to last years levels, and may even go higher later this year and next. 

Whether you are interested in saving the environment or just saving money, this may be the best year ever to buy a hybrid.  The Federal government is offering a tax credit this year for a limited number of cars, so the sooner you buy, the more likely you get the credit.  Each manufacture is limited to just 60,000 tax credits.

 

You will not get the same tax credit for each hybrid.  In fact, some hybrids will not qualify for any credit at all.  The IRS reported on June 7th that both Toyota and Lexus have sold over 41,779 qualifying vehicles.  The IRS says that “the tax credit for hybrid vehicles applies to vehicles purchased on or after January 1, 2006, and it may be as much as $3,400 (although it appears the highest credit will be $3,150 now) for those who purchase the most fuel-efficient vehicles.”

 

Here are the credits the IRS says you can get for Toyota and Lexus and Ford and Honda models:

·         2007 Toyota Camry Hybrid — $2,600

·         2005 Toyota Prius — $3,150

·         2006 Toyota Prius — $3,150

·         2006 Toyota Highlander 4WD Hybrid — $2,600

·         2006 Toyota Highlander 2WD Hybrid — $2,600

·         2007 Lexus GS 450h — $1,550

·         2006 Lexus RX400h 2WD — $2,200

·         2006 Lexus RX400h 4WD — $2,200

·         2006 Ford Escape Hybrid Front WD — $2,600

·         2006 Ford Escape Hybrid 4 WD — $1,950

·         2006 Mercury Mariner Hybrid 4 WD — $1,950

·         2005 Honda Insight CVT — $1,450

·         2006 Honda Insight CVT — $1,450

·         2005 Honda Civic Hybrid MT and CVT — $1,700

·         2006 Honda Civic Hybrid CVT — $2,100

·         2005 Honda Accord Hybrid AT and Navi AT — $650

·         2006 Honda Accord Hybrid AT w/updated calibration and Navi AT w/updated calibration — $1,300. The 2006 Honda Accord Hybrid AT and Navi AT without updated calibration qualify for a credit of $650.

 

The IRS recommends you buy early.  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 hybrid or advance lean burn technology. 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.

For example, F Company is a manufacturer of hybrid motor vehicles, but not advanced lean burn technology motor vehicles. F Company sells its 60,000th hybrid car on March 31, 2006.  This is an example given by the IRS.

Ms. Smith buys an F Company hybrid car on June 30, 2006, and claims the full credit.

Ms. Maple buys an F Company hybrid car on Dec. 31, 2006, and claims 50 percent of the credit.

Mr. Grey buys an F Company hybrid car on June 30, 2007, and claims 25 percent of the credit.

Mr. Green buys an F Company hybrid car on July 1, 2007, and is unable to claim the credit, because the credit has phased out for F Company vehicles.

 
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