Yup-I got hit for it too.

It has more to do with the AMT (Alternative Minimum Tax) than just straight income...

I got a $1295 tax credit instead of the $2,100 for our Civic. Because I also got a child care credit, it pushed down our tax credit overall.

When the credits push the taxes owed below the floor for the AMT, the credit for the Hybrid stops.

So suppose you currently owe $16,000 Federal Tax. The AMT floor is $15,000.

Your credit is supposed to be $2,100 for your Civic, so you would expect that your taxes owed would be $13,900 (16,000-2,100=13,900). Instead, because the AMT would be $15,000, you only get $1,000 credit and have a $15,000 tax burden.

In either event, we like that the Civic is getting in the high 30's in MPG, is getting my wife HOV privileges and shortening her commute by 40 minutes a day, and is offsetting both the gas-guzzling and emissions of the SUV I drive 7 miles roundtrip for work each day. We like that it keeps its value and that we have a warranty for 8 years.

Michael