The IRS has added the Ford Escape Hybrid to the list of vehicles qualifying for a $2,000 tax deduction in the year the vehicle was purchased. The IRS release is here:

http://www.irs.gov/newsroom/article/...132163,00.html

That is welcome news. We knew that Ford submitted all the paperwork about a month ago. There is also an article about it along with a photo in today's (12-14-04) LA Times.

There are some caveats, however. I quote a relevent section:

"The one-time deduction must be taken in the year the vehicle is originally used. The taxpayer must be the original owner. Individuals take this benefit as an adjustment to income on Form 1040. They do not have to itemize deductions on their tax returns to claim it."

What is important is that if you do get to drive your car on order today by 1-01-05 you must take the deduction a year from now. Also, although it is good that you need not itemize, the amount of benefit will depend on your federal tax bracket since it is a deduction, not a tax credit.

I only wish that the State of California (some say the State of Confusion) was as forward looking as many other states and had either in place or in the works some type of tax credit or deduction for Hybrids. Some good news though; you now can drive in the commuter lanes. Unfortunately for me, my nearest lane is about 100 miles away.

I have written my Senators and Congressman asking for more incentives and they have been very polite (at least the two that answered).

Mike Maline - Sdctcher
2005 Ford Escape Hybrid Owner
California School Teacher

They actually answered? Curious. I interned for my congressman for constituent services. We just wrote a brief summary and sent the information off to staff in DC. I doubt he really read most of them.

I'm not sure what I think about tax credits. I think I may be opposed to it, actually. Hybrids ar egoing to sell whether or not they're assisted by the government. Manufacturers will be sure of it. And, given the premiums consumers are willing to pay for larger cars, etc., I don't think a few hundred dollars is really going to influence that many decisions. It's a government expendature that could likely be better used elsewhere.

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