Because the 2006 AMT exemption drops $13,000 from 2005 (for married filing joint) my estimated AMT is within $200 of regular tax which means that I will only realize $200 of the tax credit on my hybrid purchase.

I would urge all 2006 hybrid purchasers to run the calculation - the drop in the exemption is estimated to cause 15 million additional taxpayers to pay some amount of AMT in 2006. There are web based calculators that you may use to estimate your 2006 regular and AMT taxes. If the difference between the two amounts is less than the expected hybrid tax credit, you will only realize the credit for the amount the regular tax exceeds the AMT.

Congress has discussed the AMT issue but taken no action to date. Given the current focus on providing incentives for energy conservation, having the hybrid credit not offset AMT while simultaneously reducing the AMT exemption effectively negates the incentive for many unsuspecting taxpayers.