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Tax credits / incentives for hybrids?
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As for being in the market for a new car, I am. My WRX is not large enough to carry my snowboard gear internally and as I compete around the US and Canada on the NorAm tour, I need something I can haul my gear in with passengers without having to use a roof rack and expose my boards to road chemicals which eat it alive.
As for xplan, each dealer invoice for the hybrid, mustang, etc has the xplan price listed. It is up to each dealer whether they honor it or not on any vehicle at any time. Before ford redid the ford partner website and began the employee pricing deal, it also listed xplan on all dealer inventory right on the website. Some dealers here are honoring the price and some are not just as some are charging MSRP and some are charging MSRP plus 5k. There's one dealer in the Seattle area that is honoring A-plan to the public on them as part of the current Ford promotion. All I can say is shop around if you qualify for either promotion.
Tax credit is applicable "only for the first time use as a new purchase" of the vehicle. No used hybrid or leases qualify.
NOTICE: New legislation has changed the tax incentives for hybrid vehicles. Hybrids placed in service by December 31, 2005 are still eligible for the tax incentives described on this page. Hybrids placed in service after this date will no longer be eligible for these deductions but may be eligible for a federal income tax credit under new legislation—the amount will depend upon the vehicle's fuel economy, estimated fuel savings, and other factors.
http://www.fueleconomy.gov/feg/tax_hybrid.shtml
Depends on how fast you file your return. If you get the car on Jan 7th, file your taxes on Jan 10th, you can bet your bottom dollar you will get the tax credit.
Once you file, the credit is yours. There are no "take backs" at that point.
The govt will have your $3k(?) interest-free for a year or more. Lots of details to sort out.
So the 2006 Calendar year purchase will put your tax credit in with the 2006 tax filing, done in 2007.
I sit corrected !!!
My overall point, however, was thatGary had pointed out how one might need to be worried that the tax refund might get changed or reduced or eliminated, and my point was that if it is ON THE BOOKS as a valid deduction WHEN YOU FILE, then you are guaranteed to receive it. The change in tax laws cannot modify your current year's filing after you have submitted it.
How much different do you think the IRS will be?
It is a crap shoot. You know that Honda will pitch a fit if they use the flawed EPA estimates on mileage. My question is what comparable vehicle from 2002 did they use for the Prius calculation? If they use the first generation of Prius there is little gain in mileage with the Prius II. It may even be as long as late next year before they make the determination. You won't be able to claim it until January of 2007 for the 2006 tax year. A lot can happen in that length of time.
If it is ONE Credit per return, joint or separate, then if one person or family purchases say, a Prius, Camry and Highlander.. then only one vehicle counts toward the 60000 unit cutoff ( which one? )... details, details, details. That is why there is a full credit for one quarter AFTER the 60000 limit is attained.
Scenario: ( As I understand it )
70000 units are delivered in the first 2 qtrs of 2006 but only 60000 get the credit due to multiple vehicle purchases by the same taxpayer... now EVERYONE who gets a Hybrid in 3rd quarter gets the credit unless they also got one in the previous two quarters ( or the 3rd Qtr ).. details, details..
So 'Yota, Honda et al, have to report their Hybrid RDR's to the IRS every quarter to tell the Feds when the probable 60000 limit is reached.. wow.. more details..
As if the tax code is not complex enough as it is. I think it was simpler the way it was. I would imagine each manufacturer will have to promote their vehicles as they did with the current deduction. I don't think the IRS will publish the credit until the end of 2006 as part of next years tax code. The information that comes out the end of this year is for your 2005 tax return. So the IRS will have all next year to hash it out.
re: claiming 10 prii credits- i think I remember reading that you can only claim the credit on cars that you plan to drive- not cars that are for resale. so if you run business and have 10 company cars- then that's ok. if you buy 10 cars and sell 9 on ebay, that's doesn't count.
re: comparison to non existant 2002 model: the credit is based on the 2002 numbers for EPA gas mileages for various weight classes. so you're not comparing a 2006 honda civic hybrid to a 2002 gas civic- you're comparing the city mileage of a 2006 civic hybrid to corresponding weight class mpg from the 2002 data. currently I don't understand how this weight class is determined (I actually went into the us laws that were referenced in this new energy law and couldn't find the info).
re: 60k limit- look back a few pages on this forum, the credit gets phased out 2 quarters AFTER the quota has been reached.
Here's my idea on what toyota should do. I think they are projected to sell over 200k hybrids next year. that means they could easily sell over 50k hybrids in the first quarter alone. with the new tax credit, its not inconceivable that demand will be much higher and they could easily blow the 60k quota in the first quarter alone leaving only Q2 to take advantage of the full credit. Toyota should HOLD BACK sales of hybrids to 59,000 hybrids in Q1. that way they have until Q3 (sept 30) for customers to take advantage of the hybrid credit. they'll sell more cars this way because toyota gets an extra 3 months to sell "discounted" hybrids.
THe added benefit of this is that by Q4, the camry should be ready to help "revitalize" hybrid sales (plus they'll get 50% of the credit- not too shabby). my hope is that the 2007 HH will be available by Q1 2007 so I can get the 50% credit then.
The govt will have your $3k(?) interest-free for a year or more. Lots of details to sort out.
The entitlement mentality is alive and well. Spyder has already decided the special tax credit for buying a hybrid is "his" money. The poor folks who buy a new Echo or Aveo get no help with a tax credit, but the middle class and up get their feel-good hybrid tax credit and already consider it an entitlement. :sick:
The Prius is more efficient than an Aveo or Yaris in both FE and emissions. It deserves to be supported so that less efficient gassers get taken off the road. The person buying my '00 4c Camry (33 mpg) is coming out of a '95 V6 Astro Van smoker. So my future Prius is replacing a clunker. We all benefit from this exchange. I started it with a new purchase. Thats what we need to do more of.
- Can you buy 10 Prius'? Get 10 credits?
- If you and your wife each get one do you have to file separate returns in 2007?
- Alternative Minimum Tax? Will it cancel your credit?
- Is it DMV registrations ( likely ) or figures reported by the automakers ( not likely ).
I'd at least get your order in and get on a list for delivery in early Jan if possible. If you wait to place your order in Jan it might be Mar when you get it.
Thank you for your help.
Only Toyota is going to be bumping up against the ceiling in calenday year 2006 - none of the others, including Honda, has enough hybrid volume to approach the cutoff until well into next year, or even beyond.
Toyota'/Lexus reach it on 5-13-06. Everyone buying in 3rd Qtr still gets the full credit. But you must take delivery by 9-30-06.
Honda reaches it on 10-02-06. Everyone taking delivery until 3-31-07 get the credit.
The full credit may go to as many as 100000 buyers !!! OTOH due to the AMT some higher-income buyers will not be able to apply the credit..
Definitely see your tax advisor!!!!!
IR-2006-57, April 7, 2006
Some Toyota and Lexus Vehicles Certified for the New Energy Tax Credit
Washington — The Internal Revenue Service has acknowledged the certification by Toyota Motor Sales U.S.A., Inc. that several of its 2006 vehicles and a 2005 model year vehicle qualify for the hybrid tax credit enacted by the Energy Policy Act of 2005. The tax credit for hybrid vehicles applies to vehicles purchased on or after January 1, 2006, and may be as much as $3,400 for those who purchase the most fuel-efficient vehicles.
The hybrid vehicle certifications recently acknowledged by the Service and their credit amounts are:
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
Starting in 2006, this tax credit replaces the tax deduction of $2,000 which was previously allowed for taxpayers who purchased a new hybrid vehicle before December 31, 2005 for the clean-burning fuel deduction. The tax credit requires a different certification. Many currently available hybrid vehicles may qualify for this new tax credit.
Consumers seeking the credit may want to buy early since the full credit is only available for a limited time. 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.
It is based on when you bought the hybrid. Your contract paperwork has the date of delivery. If it is before 20 Sep 06, you get the credit.
That is the best advice. Turbo Tax leaves a lot of information out. You can have a real surprise if audited.
Keep in mind that it is the total for the manufacturer that counts against the 60k ceiling; while the Prius is Toyota's best seller, it also sells hybrid versions of the Camry, Highlander, Lexus RX, and Lexus GS, all of which count toward the limit. Anyway, Toyota will hit the ceiling late in Q2, or early in Q3; the next quarter after that still gets full credits, then the phaseout begins in the following quarter.
Is there a requirement that I hold on to the Accord for a certain amount of time to be eligible for the deduction? Also, will it affect my eligibility for the Prius $3100 tax credit?
Thanks!
Joe
Other requirements may also apply. If any of these conditions change within 3 years of purchase, you may have to return some of the money saved by the deduction.
http://www.fueleconomy.gov/feg/tax_hybrid_old.shtml
I usually get all my withholding back and "UNCLE" isn't
paying credits to us "no-taxpayers".