Hybrid Tax Credit Not Family Friendly

We just finished our income taxes. Because we have children, basically, we will not receive one dollar of the $2,100 credit we were told we would receive when we purchased our 2006 Civic Hybrid in May of 2006.
We, however, really enjoy our Civic hybrid and enjoy the efficiency, comfort, and how clean it burns fuel. Oh well, another unexpected expense we have to put up with.

 

My wife and I have one child and we recieved the entire amount. In fact, if it wasn't for the car, we'd have owed money. I'm surprised you weren't able to recieve it.

Take Care,

Jess

 

bear15 still received it, but had a number of other credits which rendered the Hybrid tax credit useless. Is that right? There is no correlation between having children and receiving the tax credit. You either get the credit, or you do not.

 

Here in Ontario, the gov't. offers a $2000 rebate, which I took into account when I was caluculating how much my new baby would cost me. However, once the purchase was made and I sat down at home to fill out the rebate papers, I learned that it was only a rebate of the provincial sales tax up to $2000.

But as I had traded in my quite new previous vehicle, I had only paid $580 in provincial tax. So that's all I would get back. Grrrr.

 

It always comes down to AMT. Kids alone are not the only reason that you qualify for AMT and therefore no hybrid tax reduction. There are/were several articles suggesting techniques for avoiding AMT- deferring donations, deferring sale of stocks (minimizing capital gains), even which places to park your money to avoid deductions. Those who have a 2007 model; start studying AMT avoidance now!

 

I got my taxes done, and I can confirm that its UP TO a 2100 dollar credit. I only got 106 dollars. Here is the thing. The tax credit actually will match up your credit of taxes paid with what you owe. In my case, with my school credit and my standard deduction, I only owed about 106 dollars. Thats exactly how much my credit was for =) It only levels you out, doesn't put you in the green, so to speak. bear15 most likely didn't NEED the credit because of his children (since you can claim deductions for each child), and so he didn't get it. You didn't need it bear15. BUT, if somehow you owe while not using it, SOMETHING is definitely wrong.

 

It was friendly to my family.

Why don't you tell us the whole story. You have to owe some taxes to make use of this credit.

So, you don't pay taxes and you are complaining because the government did pay you more? Is that correct?

 

Actually you could owe $1,000,000 in tax but if you pay it all during 2006 and don't owe any at the time you fill out your tax form you get no hybrid tax break (you don't get a refund for the hybrid tax) as I understand it

 

That's not true. It has nothing to do with withholdings.

 

I have 3 children, and received $0 of the hybrid tax credit too. Boy was I steamed!

Even though I didn't qualify for AMT, your AMT tax basis is a floor for how low your hybrid tax credit can reduce your tax basis. Other credits do not use your AMT tax basis as a floor, so it appears to be unique to the hybrid credit.

I did sell a small amount of stock this year, but if I didn't have the $3000 credit for my kids I would have received the entire hybrid tax credit. If I hadn't sold any stock, I would have maybe received ~$400 of the credit.

It IS a child unfriendly credit.