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Tax credits / incentives for hybrids?
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Comments
Congress put AMT relief into this year's budget. I don't know if the budget has passed yet. I believe it is a COLA adjustment.
That would be good, as it was put in place during the Carter administration. Wages have gone up since then. At least mine have. I think you can average back also. So I may get some back in retirement.
Does anybody know what qualifies as a 'manufacturer' according to the IRS. Is the hybrid ceiling of 60,000 for Ford and 60,000 for Mercury (Escape and Mariner). Or do all Escapes and Mariner hybrids fall under the one manufacturer of Ford Motor Company?
Alos dones anybody know how many Ford/Mercury hybrids have been sold to date? I know that they have been selling them since 2005.
The sales volume began in 2006, and I don't think they have sold more than 20K vehicles this year.
Just because successful people purchase hybrids doesn't mean anyone can't buy them orht at they are not for everyone. Many Americans purchase vehicles in the $27,000 to $31,000 range. While not mid entry, that is certainly not luxury level and not out of the range of working Americans. These are working Americans who pay taxes, are not under the AMT and indeed can receive a federal tax credit, possibly a state tax credit as well.
Mt TCH (loaded by the way) after tax credits will be less than $24,000. That and the 37.7mpg I am averaging so far over 2300 miles should make this attractive for many working Americans.
For me this isn't a Green thing. It just makes sence. The fact that I'm not wasting gas however DOES make me feel better, especially when my credit card bill comes at the end of the month.
BTW you can make substantially more than $85,000 and still not hit the AMT.
'Yota dropped in hybrid sales by about 4,200 cars after the tax break was halved and gas prices dropped.
Let's hope this is not a downward trend.
If you drive a lot of miles they can possibly be justified on mileage. If you want access to the HOV lanes driving solo there are only a few choices. For CA commuters the Civic GX is a great choice. Yet they only sell in very limited numbers.
Not really a GREAT choice - you need a PHILL unit in your home and your range is very limited. If it was a GREAT choice a lot more of them would sell.
Part of the problem is that people are bothered by the idea of filling their car up in their garage. And so many commuters dont even HAVE a garage - another problem.
To: All Ford and Lincoln Mercury Dealers
Subject: 2008 Escape/Mariner Hybrid Tax Credit Update
Update to Tax Credits
The 2008 Escape and Mariner Hybrid will be arriving in dealerships early this year. Among the many updates we have made to the vehicles this year, one which you should be especially aware of is an improvement in real world fuel economy versus 2007MY (Window label numbers reflect new EPA calculations, see "Consumers to See Updated EPA Fuel Economy Estimates for 08 Models", communication from 12/13/06). For this reason, the IRS has approved an increase in the Federal tax credits available on our 2008MY Hybrids; up to $3,000 for FWD models (Tax credits on 2007MY Hybrids are unchanged).
Please see below for a chart which shows the federal tax credits currently available on Escape and Mariner Hybrid, as well as their competitors.
08 Escape / Mariner Hybrid (FWD) $3,000
08 Escape / Mariner Hybrid (4WD) $2,200
07 Nissan Altima Hybrid $2,350
07 Honda Civic Hybrid $2,100
07 Toyota Prius $1,575
07 Toyota Highlander $1,300
07 Saturn Vue Greenline $650
07 Escape Hybrid FWD $2,600
07 Escape / Mariner Hybrid 4WD $1,950
Background on the Tax Credit Program
Hybrid federal tax credits remain in effect until a manufacturer has sold its 60,000th Hybrid vehicle (sales after 12/31/2005 and before 12/31/2010). This means that ALL customers who purchased a Hybrid from Ford Motor Company during 2006 are eligible to claim a full credit on their 2006 tax return. In addition, it is expected that the all customers who purchase a Hybrid from Ford Motor Company during 2007 would be eligible to claim a full credit on their 2007 tax return.
Once a manufacturer reaches its Hybrid vehicle limit, the tax credits will begin to diminish. Shortly after the 60,000th unit is sold, the credit will drop to 50% of its full amount for 6 months, followed by 25% of its full amount for an additional 6 months. At that time, the tax credit will be terminated.
Last year, Toyota exceeded their ability to offer full credits. This means that Toyota Hybrid sales which occurred after 10/1/2006 have only been eligible for 50% of the full tax credit ($1,575 for Prius), and will decrease further throughout the year. Escape and Mariner however are still eligible for the full tax credit and our FWD models are currently eligible for a higher tax credit than all other Hybrid vehicles, at $3,000. As customers consider a Hybrid purchase, please ensure they are aware of this information.
For more information visit http://www.fueleconomy.gov/feg/tax_hybrid_new.shtml
Thanks
Dfincher
I'm curious, what sort of credit will I be receiving for purchasing the '06 Honda Civic Hybrid in 2006?
Thanks!
The San Francisco Chronicle published an article recently on this titled "Hybrid Tax Credit Bait and Switch". The only way to check on how much of the credit you'll actually get is to calculate what you'd owe under AMT, even if you're not subject to paying the AMT. Your famiy income, the size of your family, and the number of deductions you already take are all issues here, so it's not one size fits all.
I doubt that the Ford dealers are going to mention any of this to customers. Notice how they say that ALL customers who buy a hybrid from Ford in 2006 are eligible to claim a full credit on their 2006 return. Not that Toyota or Honda dealers mentioned it, either.
Caveat emptor...
http://www.hybridcars.com/forums/joke-tax-credit-t1225.html
I just went through my tax return exercise and can only pocket a tenth of it after child tax credit.... just makes me mad.
What's the point of posting this?
Well, just wanted to see how you folks are reacting to it and if there is anywhere we can formally complain about this.
Thanks!!
But . . . I didn't buy the car for the credit. I wanted a 5-star safety-rated car that also reduced the amount of money I was sending to regimes that use that money to fund terrorism.
So far, no regrets.
What does that mean?
I'm not opposed to promoting fuel efficiency but this tax credit approach was not too well thought out.
I have been paying close attention (scientist nerd here) for the last couple years, and have noticed that during my morning commute, when it is still dark, that as many as 1 of 3 cars are violators! the problem is a nearly complete lack of enforcement. worse yet, the people who dart into the faster-moving HOV lane from standard lanes are nearly always violators that then dart back out when their lanes start moving again. so they are slowing the HOV lane down, and creating a tremendous safety hazard as well.
of course, i understand that enforcement is difficult, particularly during dark hours ... but please please please, if you are going to [non-permissible content removed] about and/or actually write a letter to someone (please do send the CHP an email!!)... [non-permissible content removed] about lack of enforcement, not hybrids!!!
stepping off soapbox,
epi
Maybe I'm being self-indulgent, but it seems like this is even more of a kick in the teeth for the GX owners than for the hybrid folks. Sure, both hybrid and CNG drivers pay a substantial premium for their cars, but there's already a substantial infrastructure for fuelling a hybrid. With CNG, you need to plan carefully for when you're going to fuel up, because the nearest CNG pump might be 10 miles away...or more. And if that station is closed for repairs, you better be sure that you have enough gas to get to the next nearest station. Not something the average commuter wants to deal with! Adding 100 mile towing to your auto club plan is a very smart move for CNG owners.
I figured that the federal tax credit was there to help build up the number of CNG cars on the road, which would then increase the number of CNG customers, which would lead to a larger CNG fuelling infrastructure. All that would make it more likely that more people would consider buying a CNG-fuelled vehicle--no worries about where to fuel up, no needing to pay for a home fuelling unit. Sadly, I think it's going to take a lot longer to get there, because the tax credit really isn't there.
Now for the word of caution. A number of people are finding that even though they bought a hybrid because of the incentive of the tax credit, the particulars of their tax situation (because of the alternative minimum tax or other reasons) doesn't allow them to get the full tax credit when the time comes to file their taxes. So you might want to look closer at your taxes to see if you have an annoying surprise in store for April 2008.
http://autos.groups.yahoo.com/group/Civicgxtalk/files/Understand%20the%20Tax%20C- redit%20Laws/
It's in the Civicgxtalk group in Yahoo Groups.
but i think we both agree, people with questions should talk to a pro, and not us!
epi
Does anyone has any details?
Thanx!
Karol
http://www.fueleconomy.gov/feg/tax_hybrid.shtml
It looks like NY has a few benefits for alternative fuel vehicles. Several bills were proposed and expired without being enacted. Another thing to remember. You will not get the Federal tax credit if you fall under the "Alternate Minimum Tax". Check out this site.
http://www.whybuyhybrid.com/New-York-Hybrid-vehicle-purchase-Tax-Incentives.htm
The Internal Revenue Service has discontinued the federal tax credits for Toyota hybrid vehicles—including the flagship Prius—as of Oct. 1, 2007. Toyota Motor Corporation hit a legal cap in the number of vehicles sold that can offer the credit. Only hybrids purchased before the Oct. 1 deadline are now eligible for the incentive.
According to IRS rules, tax credits for new hybrid vehicles phase out when an automaker sells 60,000 hybrids. Toyota hit the magic number last summer, which initiated the beginning of the process. Honda recently reached the mark of 60,000 hybrids sold, and will now start their phase-out next year. GM, Ford, and Nissan are not expected to reach cap before 2009 when the incentive laws will be reconsidered or entirely discontinued.
Especially in California.
.
Anyone know if there are any gross income limitations on this?
(i.e.: Can you make "too much" to get it?)
http://money.cnn.com/2008/03/07/pf/taxes/2007_hybrid_tax_credit_confusion/index.- htm
Qualifying for the credit - and how much of it you can take - depends on how close you come to having to pay the Alternative Minimum Tax.
It's a problem that could affect many hybrid car buyers who have six-figure incomes and take a lot of deductions, said Wisconsin tax preparer David Mellem.
As the name implies, the AMT sets a minimum amount of tax you must pay even if you have deductions that would seem to allow you to pay less.
The AMT disallows a lot of common deductions that are allowed under the regular code. If the AMT amount is higher, you must pay the AMT.
The rule - and the rub - when it comes to determining how much of a hybrid tax credit you get is this: it isn't allowed under the AMT.
Even if you don't have to pay the AMT, it could still take a bite out of your tax credit. If the difference between your taxes and the AMT amount happens to be less than the hybrid tax credit, you can only take part of the credit. (Otherwise, it would make your taxes less than the AMT.)
Here's how it works: Bob, Jack and Jane each purchased a Ford Escape hybrid SUV in late 2007, and each was counting on a $3,000 tax credit.
At tax time, Bob finds that his tax bill is greater under the AMT than it is under the regular code, so he must pay the AMT. Bob's Escape can't help him escape his big tax bill. He gets no hybrid tax credit.
Jack's regular taxes, on the other hand, are $3,500 more than what he would have to pay under AMT. So he doesn't have to pay AMT and he gets the full $3,000 tax credit.
Jane doesn't have to pay the AMT, either. But her taxes are just $1,200 more than she would have had to pay under AMT. So instead of the $3,000 credit she was expecting, she gets a credit of just $1,800.