Hybrid Vehicle Tax Credit

Hybrid Vehicle Tax Credit

The Energy Policy Act of 2005 allows the IRS to offer a tax credit to those who purchase selected hybrid vehicles. This tax credit only goes to the original purchaser and cannot be passed to another person. The hybrid vehicle tax credit amount is usually determined by when you bought the car. Toyota and Honda have phased out their tax credits. Ford is said to be cutting their tax credit amounts in half by April 1.

If you are eligible for other tax credits, the hybrid tax credit will be taken last. The Hybrid shopper should purchase early and talk with a tax professional if this tax credit is an absolute necessity for them. The hybrid vehicle tax credit is also available when you lease a hybrid. In order to receive this tax benefit, the hybrid vehicle must be purchased before December 31, 2010.