Will I be able to get a tax return if I lease my car, or is it only available when you buy the car?

 

Federal Hybrid Vehicle Tax Credits
The Internal Revenue Service (IRS) has acknowledged the certification by Nissan North America, Inc. (NNA) that the 2008 Nissan Altima Hybrid qualifies for federal tax credits in the amount of $2,350. The Energy Policy Act of 2005 established federal tax credits for qualified hybrids purchased after January 1, 2006. The credit was designed to encourage purchases of fuel-efficient hybrid-electric vehicles that help to reduce air pollution and use less gasoline.

How to qualify for the tax credit:
1) The Hybrid vehicle must be new. Used vehicles will not qualify.
2) The Hybrid vehicle must be purchased.
a) The credit is only available to the original purchaser. If the vehicle is leased to a consumer, the leasing company may claim the credit, not the lessee.
3) The Hybrid vehicle must be placed in service on or after January 1, 2006 and purchased on or before December 31, 2010.
4) The tax credit is claimed by the purchaser on their federal income tax return. The purchaser must retain appropriate documentation showing the purchase of the vehicle and the date of the delivery of the vehicle.
5) Benefit of the credit will be substantially reduced or eliminated if the purchaser is subject to the federal alternative minimum tax (AMT).
Eligible Vehicles

As of August 7, 2007, the IRS acknowledged NNA’s certification for the 2008 Nissan Altima Hybrid and the hybrid vehicle credit in the amount of $2,350.
Please visit the website link “Click here for the IRS Certification of 2008 Nissan Altima Hybrid” for more information.

In short - a leased Nissan Altima Hybrid does not qualify for a tax credit. But at least you are doing your part in saving gas.

 

It's important to note that the leasing company gets the tax credit. I'm not sure if there are any tax implications that could prevent them from taking advantage of it, but it should be a basis for getting a better lease deal.

Unless this is part of a business strategy, I would question why one would lease a hybrid. The tax credit would offset the down payment and payments would probably be lower than lease payments, with a greater residual value because of the high potential resale of a hybrid.

Actually, if your credit is good, these days you can often buy a car with no money down. I walked out with my FEH with $0 down and 3.9% financing. Leases almost always require deposits.

 

It's a car thats leased through a business, and buying isn't smart for me at this time. I'm just wondering if the dealer (or NNA) will actually get the $2350 rebate, thus allowing me to negotiate the price down $2000. Thanks.

 

Thats good to hear!

 

Well, okay. Does the tax credit must be claimed "only" by the purchaser on their federal income tax return? The purchaser must retain appropriate documentation showing the purchase of the vehicle and the date of the delivery of the vehicle(what are these documents) I am just confused.
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I know this is an older thread, but I think that it's important to bring this out.

It appears that you may misunderstand this issue. The IRS is not giving a tax rebate or refund for purchasing a qualifying hybrid car. It is a tax CREDIT, which means that whatever you owe to the IRS will have that amount deducted from it.

The way I read the tax code, if I owed the IRS $600 (AFTER WITHHOLDING) this year, my $1050 CREDIT for my HCHII would be deducted from that amount until it reaches zero ($0.00); then any remaining credit just disappears (no refund). It does not roll over into the next tax year.

For the Oklahoma tax credit, it is $1500 for my HCHII; applies the same way as the federal, BUT it will roll over for a total of three tax years. So if I have any credit remaing after my 2008 filing, I can apply it to my next two returns.

I'm still trying to figure out if you are entitled to a refund, what the effect of the credit is. If it is applied to tax owed (total) from tax tables; it seems that it could boost your tax refund. Example: Total tax due $8500, tax withheld $9000; refund of $500. Total due $8500 MINUS the $1050 tax credit - $7450, $9000 withheld, refund= $1550???

If anybody has the answer, please post it!

Thanks