Tax Credits for Hybrid Autos

Tax Credits for Hybrid Autos

Taxpayers who purchased or leased any of 44 different models of hybrid vehicles in 2008 may be entitled to a tax credit on their returns worth as much as $3,150 for the most fuel-efficient models. The precise amount of the credit depends on the make and model of the vehicle and when the vehicle was purchased. Taxpayers may claim the credit on their tax returns only if they placed a qualified hybrid vehicle in service in 2008. The Alternative Motor Vehicle Credit for hybrid vehicles — powered by both an internal combustion engine and a rechargeable battery — was enacted as part of the Energy Policy Act of 2005. Taxpayers may claim the full amount of the allowable credit only up to the end of the first calendar quarter after the quarter in which the manufacturer records its sale of the 60,000th hybrid vehicle. The only manufacturer for whom the credit has been limited in the 2006 tax year is Toyota Motor Sales, USA, which includes Lexus.