Hybrid Tax Credit
#1
01-04-2010, 03:55 PM
Join Date: Dec 2004
Location: Roswell, GA
Posts: 322
Hybrid Tax Credit
I just visited the Turbo Tax site online and they have followed the 8910 form for gathering your purchase and "in-service" information. People that don't follow the forums may make the mistake of putting their delivery date as their purchase date. If you ordered your Hybrid, put the date of your order in the purchase date box. The in-service date is the date you took possession and began driving your new hybrid. The program should calculate your tax credit correctly from there.
If you purchased from dealer inventory, your "purchase" date and in-service date may be the same.
I ordered my Fusion Hybrid in February and took delivery in April of 2009 so I will get the full $3,400 tax credit against my 2009 taxes.
A lot of tax preparers will not understand this 8910 form and buyers will miss out on the tax credit they should get - same with IRS phone clerks. They are going to try to tell you that the purchase date is the date you signed the final papers - not so --- your order was the committment to purchase and that date should be in the purchase box.
If you purchased from dealer inventory, your "purchase" date and in-service date may be the same.
I ordered my Fusion Hybrid in February and took delivery in April of 2009 so I will get the full $3,400 tax credit against my 2009 taxes.
A lot of tax preparers will not understand this 8910 form and buyers will miss out on the tax credit they should get - same with IRS phone clerks. They are going to try to tell you that the purchase date is the date you signed the final papers - not so --- your order was the committment to purchase and that date should be in the purchase box.
#2
01-04-2010, 05:36 PM
Join Date: Dec 2004
Location: Roswell, GA
Posts: 322
Re: Hybrid Tax Credit
For the non-believer accountants----
Study the 8910 instructions provided by the IRS in 2007 - look at the example:
"Summary of the Credit for Qualified Hybrid Vehicles
Updated frequently — last updated Nov. 08, 2007
The Energy Policy Act of 2005 provides a credit for taxpayers who purchase certain energy efficient vehicles, including Qualified Hybrid vehicles.¹ Notice 2006-9 provides procedures for manufacturers to certify to the Internal Revenue Service that certain passenger autos and light trucks qualify for the credit and the amount of the credit.² The credit amount for qualified hybrid vehicles other than passenger autos or light trucks is computed using a different formula. Guidance regarding the credit for new qualified hybrid motor vehicles that are not passenger automobiles or light trucks will be provided in a separate notice. Generally, for a passenger car or light truck that is a qualified hybrid vehicle, a taxpayer may rely on the manufacturer’s certification that a specific make, model and model year vehicle qualifies for the credit and the amount of the credit for which it qualifies.³
Even though a manufacturer has certified a vehicle, a taxpayer must meet the following requirements to qualify for the credit:
The vehicle must be placed in service after 12-31-05 and purchased on or before 12-31-10.
The original use of the vehicle must begin with the taxpayer claiming the credit.
a. The credit may only be claimed by the original owner of a new, qualifying, hybrid vehicle and does not apply to a used hybrid vehicle.
The vehicle must be acquired for use or lease by the taxpayer claiming the credit.
a. The credit is only available to the original purchaser of a qualifying hybrid vehicle. If a qualifying vehicle is leased to a consumer, the leasing company may claim the credit.
b. For qualifying vehicles used by a tax-exempt entity, the person who sold the qualifying vehicle to the person or entity using the vehicle is eligible to claim the credit, but only if the seller clearly discloses in a document to the tax-exempt entity the amount of credit.
The vehicle must be used predominantly within the United States.
Credit Phase Out
The new qualified hybrid motor vehicle credit begins to phase out in the second calendar quarter after the calendar quarter in which at least 60,000 of the manufacturer’s qualifying passenger automobiles and light trucks have been sold. Notice 2006-9 requires manufacturers that have received acknowledgement of its certification must submit to the Service a report of the number of qualified vehicles sold to a retail dealer during the calendar quarter. For this purpose, qualified vehicles are any passenger automobile or light truck that is a new advanced lean bury technology motor vehicle or a qualified hybrid motor vehicle. After review of the quarterly reports, the Service will issue an acknowledgement letter to the vehicle manufacturer stating whether purchasers many continue to rely on the certification.
Notice 2006-78 announced the credit phase out schedule for advanced lean burn technology vehicles and hybrid vehicles manufactured by Toyota Motor Sales USA, Inc. (Toyota and Lexus vehicles). For the period of 10-1-06 to 3-31-07, purchasers of qualifying vehicles are eligible for 50% of the allowable credit. For the period of 4-1-07 to 9-30-07, purchasers of qualifying vehicles are eligible for 25% of the allowable credit. The table below includes both the full credit and the reduced credit amount depending upon when the vehicle was purchased.
The date of purchase determines the amount of the credit available for a vehicle, i.e. whether a vehicle is eligible for the full credit or whether a portion of the credit is phased-out. The placed in service date determines the taxable year in which the credit may be claimed.
For example, if consumer A purchases a Prius on Sept. 30, 2006, and takes possession in February 2007, consumer A can claim the full credit for 2007, the year in which the vehicle is placed in service. On the other hand, if consumer B purchases a Prius on Oct. 1, 2006, and takes possession of the vehicle in February 2007, Consumer B can claim 50% of the credit in 2007, the year in which the vehicle is placed in service."
Since there is no other scenario that fits "Purchase on Sept.30, 2006 and take delivery on February, 2007" it is clear that a committment to purchase is the same as "purchase". If nothing else, copy this and give it to your accountant.
Study the 8910 instructions provided by the IRS in 2007 - look at the example:
"Summary of the Credit for Qualified Hybrid Vehicles
Updated frequently — last updated Nov. 08, 2007
The Energy Policy Act of 2005 provides a credit for taxpayers who purchase certain energy efficient vehicles, including Qualified Hybrid vehicles.¹ Notice 2006-9 provides procedures for manufacturers to certify to the Internal Revenue Service that certain passenger autos and light trucks qualify for the credit and the amount of the credit.² The credit amount for qualified hybrid vehicles other than passenger autos or light trucks is computed using a different formula. Guidance regarding the credit for new qualified hybrid motor vehicles that are not passenger automobiles or light trucks will be provided in a separate notice. Generally, for a passenger car or light truck that is a qualified hybrid vehicle, a taxpayer may rely on the manufacturer’s certification that a specific make, model and model year vehicle qualifies for the credit and the amount of the credit for which it qualifies.³
Even though a manufacturer has certified a vehicle, a taxpayer must meet the following requirements to qualify for the credit:
The vehicle must be placed in service after 12-31-05 and purchased on or before 12-31-10.
The original use of the vehicle must begin with the taxpayer claiming the credit.
a. The credit may only be claimed by the original owner of a new, qualifying, hybrid vehicle and does not apply to a used hybrid vehicle.
The vehicle must be acquired for use or lease by the taxpayer claiming the credit.
a. The credit is only available to the original purchaser of a qualifying hybrid vehicle. If a qualifying vehicle is leased to a consumer, the leasing company may claim the credit.
b. For qualifying vehicles used by a tax-exempt entity, the person who sold the qualifying vehicle to the person or entity using the vehicle is eligible to claim the credit, but only if the seller clearly discloses in a document to the tax-exempt entity the amount of credit.
The vehicle must be used predominantly within the United States.
Credit Phase Out
The new qualified hybrid motor vehicle credit begins to phase out in the second calendar quarter after the calendar quarter in which at least 60,000 of the manufacturer’s qualifying passenger automobiles and light trucks have been sold. Notice 2006-9 requires manufacturers that have received acknowledgement of its certification must submit to the Service a report of the number of qualified vehicles sold to a retail dealer during the calendar quarter. For this purpose, qualified vehicles are any passenger automobile or light truck that is a new advanced lean bury technology motor vehicle or a qualified hybrid motor vehicle. After review of the quarterly reports, the Service will issue an acknowledgement letter to the vehicle manufacturer stating whether purchasers many continue to rely on the certification.
Notice 2006-78 announced the credit phase out schedule for advanced lean burn technology vehicles and hybrid vehicles manufactured by Toyota Motor Sales USA, Inc. (Toyota and Lexus vehicles). For the period of 10-1-06 to 3-31-07, purchasers of qualifying vehicles are eligible for 50% of the allowable credit. For the period of 4-1-07 to 9-30-07, purchasers of qualifying vehicles are eligible for 25% of the allowable credit. The table below includes both the full credit and the reduced credit amount depending upon when the vehicle was purchased.
The date of purchase determines the amount of the credit available for a vehicle, i.e. whether a vehicle is eligible for the full credit or whether a portion of the credit is phased-out. The placed in service date determines the taxable year in which the credit may be claimed.
For example, if consumer A purchases a Prius on Sept. 30, 2006, and takes possession in February 2007, consumer A can claim the full credit for 2007, the year in which the vehicle is placed in service. On the other hand, if consumer B purchases a Prius on Oct. 1, 2006, and takes possession of the vehicle in February 2007, Consumer B can claim 50% of the credit in 2007, the year in which the vehicle is placed in service."
Since there is no other scenario that fits "Purchase on Sept.30, 2006 and take delivery on February, 2007" it is clear that a committment to purchase is the same as "purchase". If nothing else, copy this and give it to your accountant.
#3
01-08-2010, 01:37 PM
Join Date: Dec 2004
Location: Roswell, GA
Posts: 322
Re: Hybrid Tax Credit
Just remembered a statement from Consumer Reports from Jan. 2009=====
"Ford Motor Company hybrids, along with the Escape and Mariner hybrid SUVs, are eligible for full tax credits if purchased or ordered before March 31st. After that time, the credits are reduced by 50 percent due to Ford crossing the 60,000-vehicle threshold that begins a scale-down process for tax credits. "
And this from ask.cars.com======
"Tax analysts at H&R Block say the purchase contract for a new car will set the date for when you qualify for the credit. Delivery paperwork from the dealership will verify the in-service date. As long as the vehicle is placed in service during the 2009 calendar year, you will be able to claim the tax credit on your 2009 taxes. "
"Ford Motor Company hybrids, along with the Escape and Mariner hybrid SUVs, are eligible for full tax credits if purchased or ordered before March 31st. After that time, the credits are reduced by 50 percent due to Ford crossing the 60,000-vehicle threshold that begins a scale-down process for tax credits. "
And this from ask.cars.com======
"Tax analysts at H&R Block say the purchase contract for a new car will set the date for when you qualify for the credit. Delivery paperwork from the dealership will verify the in-service date. As long as the vehicle is placed in service during the 2009 calendar year, you will be able to claim the tax credit on your 2009 taxes. "
Last edited by Red; 01-08-2010 at 01:41 PM.
#4
01-14-2010, 12:14 PM
Join Date: Dec 2004
Location: Roswell, GA
Posts: 322
Re: Hybrid Tax Credit
I just installed the 2009 version of Turbo Tax on my computer and rushed over to the Tax credit folder. The Hybrid purchase data capture form is like the 8910 IRS form - that is, it doesn't spell out that the purchase date (which sets the amount of credit you may claim) can be the same as your order (commitment to puirchase) date. A lot of tax preparers will miss this distinction and tax payers will miss out on their full credit eligibility.
Don't let it happen to you!
UPDATE - entered enough income and taxes witheld, to see if the calculations were correct - and they were - $3,400 credit. I just wish they would explain that the "Purchase Date" is the date you commit to purchase (order) or the date you purchase, if from dealer stock.
If anyone has the H.&R. Block software (Tax Cut) - let us know if they do a better job of explaining the credit qualification.
Don't let it happen to you!
UPDATE - entered enough income and taxes witheld, to see if the calculations were correct - and they were - $3,400 credit. I just wish they would explain that the "Purchase Date" is the date you commit to purchase (order) or the date you purchase, if from dealer stock.
If anyone has the H.&R. Block software (Tax Cut) - let us know if they do a better job of explaining the credit qualification.
Last edited by Red; 01-22-2010 at 02:13 PM.
#5
02-28-2010, 06:48 PM
Re: Hybrid Tax Credit
Red--- you seem to be the expert on this, so I will ask. Forgive me in advance if this question has been answered elsewhere.
Are hybrid vehicle purchases like other tax situations in that they extend through April 15th (i.e. contributing to a Roth IRA)? In other words, I purchased my vehicle in February of 2010, so do I have the option of using the tax credit in either 2009 or 2010? Or, am I just eligible for 2010?
Thanks!
Are hybrid vehicle purchases like other tax situations in that they extend through April 15th (i.e. contributing to a Roth IRA)? In other words, I purchased my vehicle in February of 2010, so do I have the option of using the tax credit in either 2009 or 2010? Or, am I just eligible for 2010?
Thanks!
#6
03-01-2010, 05:31 AM
Join Date: Dec 2004
Location: Roswell, GA
Posts: 322
Re: Hybrid Tax Credit
No, sorry. There are two dates that determine how much tax credit you recieve and for which year you can claim it. The 8910 form will ask you when the vehicle was put into service. In your case, Feb. 2010 will mean that you must wait untill 2011 to calim your credit against your 2010 taxes.
If you bought the vehicle out of dealer stock, your "purchase" date would be the same as the in-service date and you may claim $850 or 25% of $3,400.
If you had ordered "committed to purchase" prior to Oct. 1, 2009 and had taken delivery in Feb. 2010 -- your tax credit would have been $1,700 and would still have been claimed in 2011.
There are many tax services that will mess this up and filers will not get the credit for which they are entitled (because the 8910 form instructions have changed since 2007.)
If you bought the vehicle out of dealer stock, your "purchase" date would be the same as the in-service date and you may claim $850 or 25% of $3,400.
If you had ordered "committed to purchase" prior to Oct. 1, 2009 and had taken delivery in Feb. 2010 -- your tax credit would have been $1,700 and would still have been claimed in 2011.
There are many tax services that will mess this up and filers will not get the credit for which they are entitled (because the 8910 form instructions have changed since 2007.)
#7
03-01-2010, 05:40 AM
Re: Hybrid Tax Credit
No, sorry. There are two dates that determine how much tax credit you recieve and for which year you can claim it. The 8910 form will ask you when the vehicle was put into service. In your case, Feb. 2010 will mean that you must wait untill 2011 to calim your credit against your 2010 taxes.
If you bought the vehicle out of dealer stock, your "purchase" date would be the same as the in-service date and you may claim $850 or 25% of $3,400.
If you had ordered "committed to purchase" prior to Oct. 1, 2009 and had taken delivery in Feb. 2010 -- your tax credit would have been $1,700 and would still have been claimed in 2011.
There are many tax services that will mess this up and filers will not get the credit for which they are entitled (because the 8910 form instructions have changed since 2007.)
If you bought the vehicle out of dealer stock, your "purchase" date would be the same as the in-service date and you may claim $850 or 25% of $3,400.
If you had ordered "committed to purchase" prior to Oct. 1, 2009 and had taken delivery in Feb. 2010 -- your tax credit would have been $1,700 and would still have been claimed in 2011.
There are many tax services that will mess this up and filers will not get the credit for which they are entitled (because the 8910 form instructions have changed since 2007.)
#9
03-04-2010, 06:10 AM
Re: Hybrid Tax Credit
okay, the hybrid tax credit is a nice idea. I qualified in terms of purchased vehicle including dates and everything but the clincher was, if your income is this much dollars xxx,xxx.00 then you cannot claim the tax credit. what!!!!
#10
03-04-2010, 11:31 AM
Join Date: Dec 2004
Location: Roswell, GA
Posts: 322
Re: Hybrid Tax Credit
I've seen no qualifier for the tax credit, except that you had to have at least as much tax due as the amount of credit claimed. Are you saying you got stopped by the AMT?
You better do some more research, The tax credit is $ for $ off your taxes.
You better do some more research, The tax credit is $ for $ off your taxes.
