IRS and Treasury Provide Guidance to Hybrid Manufacturers - GreenHybrid

bar10dah · #1 (**permalink**) 01-13-2006, 05:14 PM

Just received this email from the IRS:

Quote:

IRS Newswire

IR-2006-012

January 13, 2006

IRS and Treasury Provide Guidance to Hybrid Manufacturers

WASHINGTON — Today the IRS and Treasury have provided guidance on a process that manufacturers can use to certify the amount of credit the purchaser of a hybrid or lean burn vehicle can claim. Taxpayers who are purchasing these vehicles will be able to rely on the manufacturer’s certification when they claim the credit on their tax return.

The tax credit for hybrid vehicles, which was enacted by the Energy Policy Act of 2005, may be as much as $3,400 for those who purchase the most fuel-efficient vehicles. Hybrid vehicles have drive trains powered by both an internal combustion engine and a rechargeable battery. Many currently available hybrid vehicles will qualify for the tax credit. The guidance also provides a similar certification process for advanced lean burn technology vehicles.

Since taxpayers may claim the full amount of the allowable credit only up to the end of the first calendar quarter after the quarter in which the manufacturer records its sale of the 60,000th hybrid and advanced lean-burn technology motor vehicle, consumers seeking the credit may want to buy early in the year.

The Energy Policy Act also provides tax credits for motor vehicles that are not covered by today’s guidance. The other vehicles eligible for credits are fuel cell vehicles, alternative fuel vehicles, and hybrid heavy trucks. The IRS will issue guidance providing certification procedures for these vehicles in the near future.

Related link:

Notice 2006-09<<<

bar10dah · #2 (**permalink**) 02-08-2006, 05:01 PM

Quote:

IRS Newswire

IR-2006-026

February 8, 2006

IRS Certifies 2006 Toyota Prius Hybrid Vehicle for 2005 Deduction

WASHINGTON — The Internal Revenue Service has certified the model year 2006 Toyota Prius Hybrid for the clean fuel vehicle deduction. This certification means that taxpayers who purchased a 2006 Toyota Prius new during calendar year 2005 may claim a tax deduction of up to $2,000 on line 36 of Form 1040.

The agency stresses that the $2,000 deduction is for tax years 2005 and earlier. Starting in 2006 the deduction is replaced with a credit, which will require a different certification. 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.

For taxpayers filing their 2005 tax returns, however, the deduction must be taken in the year the vehicle was originally used and the taxpayer must be the original owner. Since this benefit can be taken as an adjustment to income on Form 1040, individuals do not have to itemize deductions to claim this deduction.

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