Tax credits-- the final frontier?? - GreenHybrid

desdemona · #1 (**permalink**) 07-30-2007, 10:33 PM

What is all this with tax credits?
Could someone point me to a good set of threads or references as I don't get this at all. For instance supposedly a HCH has a better one than a Prius which makes zero sense to me, but that is why its the 'final frontier".

Thanks,

--des

spartybrutus · #2 (**permalink**) 07-31-2007, 07:01 AM

you get a potential tax credit for purchasing new hybrid vehicles. the credits available started out higher but get reduced over time based on how many of the hybrid model were sold to date ==> prius sold lots = tax credit drying up while HCH2 sold less = still some tax credit.

google irs hybrid tax credit.

Ian33 · #3 (**permalink**) 07-31-2007, 08:08 AM

A hybrid's starting tax credit is based on its fuel economy. The Prius started in the $3000+ range. Cars like the Camry or Altima hybrids start in the $2000+ range. The Silverado truck tax credit only started around $650.

After a certain number of a particular model is sold (I thought it was around 90,000 some say it's only 60,000) the tax credits get reduced each quarter until they are gone. The Prius has passed this number, others have not. This is why the Prius tax credit is so small and will soon be gone, if it is not gone already, but cars like the Altima hybrid, which was introduced this year, still have their full amount.

Finally, the amount of tax credit you actually get depends on what tax bracket you are in and if you are affected by the AMT (Alternative Minimum Tax). Basically, if your salary is high enough and your deductions large enough to trigger the AMT, you will not get the tax credit or only get some of it. Basically if your family income is over $100,000 or so you will most likely need a creative accountant to get the full credit.

Note: Some states also have tax credits in addition.

gumby · #4 (**permalink**) 07-31-2007, 10:57 PM

Excellent summaries, Sparty & Ian!
I also remember the trigger point for the decreasing credit being after 60,000 units sold.

desdemona · #5 (**permalink**) 08-01-2007, 12:14 AM

Thanks everybody for their great summaries. As for the tax bracket, I would not have to resort to creative accounting. Too bad. :-)

--des

Quote:

Originally Posted by Ian33

A hybrid's starting tax credit is based on its fuel economy. The Prius started in the $3000+ range. Cars like the Camry or Altima hybrids start in the $2000+ range. The Silverado truck tax credit only started around $650.

After a certain number of a particular model is sold (I thought it was around 90,000 some say it's only 60,000) the tax credits get reduced each quarter until they are gone. The Prius has passed this number, others have not. This is why the Prius tax credit is so small and will soon be gone, if it is not gone already, but cars like the Altima hybrid, which was introduced this year, still have their full amount.

Finally, the amount of tax credit you actually get depends on what tax bracket you are in and if you are affected by the AMT (Alternative Minimum Tax). Basically, if your salary is high enough and your deductions large enough to trigger the AMT, you will not get the tax credit or only get some of it. Basically if your family income is over $100,000 or so you will most likely need a creative accountant to get the full credit.

Note: Some states also have tax credits in addition.