I am sick and tired of everybody claiming the government did a bait and switch on them concerning the hybrid tax credit. There was no switch and bait done. They did not promise a big credit to just take it back. The tax laws are the same today as they were when you bought your car in 2006 (at least any laws that apply to the 2006 tax year).

Everybody keeps atacking the hybrid credit at the evil wrong dooer, but they fail to realise that with all the tax cuts, deductions and credits they are claiming to drop them below the AMT, they are actually paying less than if those cuts, deductions and credits were not there. The hybrid credit can work IF you fall into a category that your tax liability is high. If your tax liability is low, then just be happy that it is low and keep on moving.

Now, I don't like the AMT, but it does keep some people from creating too many tax shelters and reducing their tax liability to rediculiously low levels. The big problem is that once you get over a certain income level, this AMT is not as effective, and those income levels are the ones that have all the silly tax shelters. Most people between the income levels of $50,000 and $500,000 are not the ones with all the tax shelters, but it is the people with incomes above $500,000 that don't pay a good proportional amout of taxes due to the shelters, and the AMT does not hit them as hard as those in the middle section.

So, we sould all be foaming at the moth over the AMT and not the hybrid tax credit. Lets give credit where credit is due.

Thank you. I agree!

I disagree

I qualify for the credit, but not the full credit

I had about 5200 witheld for federal income tax
I had education credits, hybrid vehicle credit, mortgage credits

however my refund is only about 3200, therefore 2000 is still on the table.

they only credit me with 852 of the hybrid car credit. which means that I have an outstanding tax liability of 2000 and a credit remaining of about 1300. My understanding is that the entire credit should have been applied. My final tax liability should have been 700, so if i take the 5200 witheld and the 700 left, my refund should be 4500.

this is all approximate, but very close to reality. Basically I think i should have recieved the full 2100 dollar credit.

either way, there should be an annotation about the credit telling you that you may not qualify if your not wealthy. In which case you dont really care about the extra credit because you have plenty of other loop holes to get out of paying your fed income tax.


people have every right to be upset. If a large number of people feel decieved then there is probably something to the claim. The alternative is to blame the individuals for not understanding the tax code. Which is proposterous.

The true issue here isn't whether a bunch of tax gurus understand how the credit works. Many of you have wowed us with your knowledge of tax laws and how they pertain to this particular instance. We get it. You're really intelligent. However, not the issue.

The issue here is whether or not the credit was misrepresented to the layperson, and the answer is yes. Did you go to the dealer and hear "If you buy the car, you get the credit"? Did you read all the articles identifying the credits for each individual car but not including any information regarding the AMT catch? So, to the average person with average amount of tax knowledge, was it reasonable to assume that the credit was exactly that? Again, yes.

Please don't bore me with your ramblings about how I am a silly person for not spending a week at the local library immersed in the US Tax Codes to truly understand the innerworkings of the IRS. I acted based on what I was told by people who were in a position of trust. None of those people identified the potential that the credit has become.

I have read several articles on the topic and did not immerse myself in the tax code.

Why would you trust the salesman? I, like I have done, would have researched it before I planned on getting it to see if there was any catch.

The AMT is not specifically linked to the credit. The AMT prevents you from deducting or crediting numerous things. I just bought a house this year and I was told that I can deduct the mortgage interest and property taxes. No one mentioned the AMT to me but the AMT could prevent me from claiming the full deduction on these items.

The AMT is the problem, not the tax credit. It was designed for the wealthy but recently is has been squeezing the middle class. It needs revised but it hasn't been done.

Also, from what I understand, you have an AMT credit that you can hold. Next year if you can apply part or all of that AMT credit toward next year's taxes. You aren't completely screwed out of the money. I don't know this for sure because I didn't research it as much because it doesn't apply to me. Research it for yourself, and please don't come back and blame me next year if I am wrong because you trusted me and didn't check for yourself.

If you want to complain fine, I did by starting this post.

But if you are going to complain, there are like 50 posts now with people complaining that they believed everything the salseman told them.

When I asked my salesman about the credithis exact words were, "I know there is a credit, but I don't know everything about it so you should do some research to find out exactly what it is."

If your salesman told you different, they were playing accountant, and salesmen should never be trusted at what they say. They are trying to get your money, and some are not scrupulous about doing it.

My tax liability is well over $10,000 after all credits, etc... (not going to disclose how much over). Am I happy to pay that much, no. But am I happy that I make enough to need to pay that much, yes.

Absolutely true. I'm not only foaming about AMT, but about the insanely complex tax code that I am a subject to. It's nothing but a complex system of extortion and bribery. Politicians bribe various groups by sponsoring loopholes in the tax code. They bribed the middle class by enacting the AMT to "screw the rich", then they bribed the rich by excluding the really rich from the AMT. Then after that, they bribed the environmentalist by sponsoring the hybrid tax credit, but then turned around and bride domestic auto makers by capping it so foreign autos loose the credit first. True, no one really understands the US tax code, least of which are the politicians that write it. The only exception would be the Tax attorneys that make a living out of interpreting the tax code in a court of law. My tax code would consist of three simple bytes "23%". Done, no lawyers, no turbo-tax, no confusion. There has always been a simple solution, but politicians have no motivation to loose there power and levers of bribery and extortion. I've written all the right people and joined the tax reform group (fairtax.org) and invite you to do the same. Unfortunately unless the public can convince the government to change, it won't, and neither will the convoluted tax code.

Currently atempting a KiloTank WITH AC (1000 mile tank)
Houston Hybrid and Hypermilers Club <106mpg.com>

Best commute RT = 27.5mi @ 90.5 MPG (sg2)
Best (non-trivial) tank = 665.5mi @ 85.7 MPG (fcd)
MPG Centurion - Hybridfest 2007 - Prius II - 26mi @ 106 MPG (sg2)
Dan <11011011> @ CleanMPG.com

I can see the point of those who got caught by the AMT. Many are ignorant of it because they've never had to pay it. So it's not surprising it surprised them. I wouldn't call it "bait and switch" as some have -- that implies a deliberate misrepresentation -- but instead, as I commented in another thread (and echoed by Dan here), it's a symptom of a tax system in bad need of an overhaul.

What galls me is people whose tax liability is low to begin with and expect to get a credit for more than what they owe in taxes. Who would pay the difference? The rest of us. It's more of the entitlement mentality run amuck. Unlike those with the AMT issue, most of these folks can't plead ignorance.

Jim

Lifetime fuel mileage:

After learning how to hypermile:

Yea, I don't understand: I paid $2000 and my credit is $4000 so the government owes me $2000. The government does not make money. The tax payers do. If you get the government to pay you more than you paid them, you are getting your neighbors and relatives to actually pay you.

Don't forget that corporate slaves like me only see half of what the government gets. If I payed $2000 in taxes, my company also paid around $2000 in taxes. So because I'm working, the government got $4000. That's what burns me most about taxes. The IRS actually collects twice as much as is shown on your pay stub.

Since I've started my own biz, it becomes ohh too clear how much gets paid. But I couldn't agree more... It's better to make a lot and keep a little, than to only make a little!

Currently atempting a KiloTank WITH AC (1000 mile tank)
Houston Hybrid and Hypermilers Club <106mpg.com>

Best commute RT = 27.5mi @ 90.5 MPG (sg2)
Best (non-trivial) tank = 665.5mi @ 85.7 MPG (fcd)
MPG Centurion - Hybridfest 2007 - Prius II - 26mi @ 106 MPG (sg2)
Dan <11011011> @ CleanMPG.com