New tax breaks for Hybrid cars 2006
12-22-05, 03:58 PM
#1
Speaks French in Russian
Thread Starter
New tax breaks for Hybrid cars 2006
Some might already know, but since I already posted about the Pruis vs. Civic thread, thought this might be some additional info for those that are actually looking to buy. ENJOY!! 
http://money.cnn.com/2005/12/21/Auto...dits/index.htm
Starting next year, buying a fuel-efficient vehicle will help keep IRS at bay.December 22, 2005: 1:15 PM EST
By Peter Valdes-Dapena, CNNMoney.com staff writer
NEW YORK (CNNMoney.com) - If you just bought a brand new fuel-efficient hybrid vehicle, sorry but you should have waited.
Starting Jan. 1, 2006, buyers of some hybrid vehicles can get a hefty tax credit. But the credits vary a lot and some very fuel-efficient vehicles still get no credits at all.
In some cases, though, the credits are large enough to almost entirely make up the additional cost of the hybrid vehicle as compared to a non-hybrid. That means any money you save on gas will actually go directly into your pocket.
Previously, some hybrid vehicle purchases have been eligible for tax deductions. The new credits, however, are subtracted directly from the money you owe the IRS. That makes these credits much more valuable than deductions.
Even though the new tax law covers diesels as well as hybrids, no diesel vehicles will get tax credits in spite of the fact that some get extremely high gas mileage, according to an analysis by the American Council for an Energy Efficient Economy.
The Internal Revenue Service has not officially said, yet, what the tax credits will be, but the ACEEE based its figures on what is currently known about 2006 vehicles and the wording of the law.
The amount of the credit for each vehicle is based on three factors:
First, how large is the vehicle? The amount of the credit is based on the vehicle's fuel economy as compared to a similar 2002 model-year vehicle. To get any credits at all, a vehicle must get at least 25 percent better fuel economy than a similar 2002 vehicle.
A vehicle could also get a smaller credit if it is estimated to save at least 1,200 gallons of fuel over its lifetime.
Vehicles also must meet certain emissions standards to qualify for a tax credit. Regardless of their fuel economy, no diesel vehicles currently meet the emissions requirement for a tax credit.
Toyota Prius
Tax credit shooting star
The Prius will get the second-largest tax credit of any vehicle. Buyers will get $3,150 off their federal taxes. But you'd better not wait too long, because credits on Toyota hybrids will probably start shrinking and, ultimately, disappear sooner than those for other hybrid vehicles.Tax credits for hybrid vehicles sold by any given car company begin to phase out once that manufacturer has sold 60,000 eligible vehicles. Toyota, which sells hybrids under both the Toyota and Lexus brands, will probably reach that limit well before the end of 2006.
Honda Civic GX
Buyers of Honda's natural gas-powered car will be eligible for a $3,600 tax credit, the largest for any vehicle. However, Honda has no plans, currently, to sell the Civic GX outside the state of California.
Ford Escape Hybrid
If you buy a Ford Escape Hybrid or it's sister-vehicle, the Mercury Mariner Hybrid, you'll be eligible for a $2,600 credit for the front-wheel drive version or $1,950 for one with four-wheel drive.
Honda Insight
Buying the two-seat Honda Insight, the most fuel efficient vehicle currently sold in the United States, could get you a $1,450 tax credit. Or it could get you bupkis. It depends on whether you get the car with a manual or automatic transmission. The manual transmission version doesn't meet emissions requirements for a tax credit.
Chevrolet Silverado Hybrid
Chevrolet Silverado hybrid buyers will be eligible for a credit of just $250 reflecting the truck's tiny fuel savings. The hybrid Silverado is really designed to provide electric power at worksites with a small amount of fuel savings thrown in as a bonus.
By Peter Valdes-Dapena, CNNMoney.com staff writer
NEW YORK (CNNMoney.com) - If you just bought a brand new fuel-efficient hybrid vehicle, sorry but you should have waited.
Starting Jan. 1, 2006, buyers of some hybrid vehicles can get a hefty tax credit. But the credits vary a lot and some very fuel-efficient vehicles still get no credits at all.
In some cases, though, the credits are large enough to almost entirely make up the additional cost of the hybrid vehicle as compared to a non-hybrid. That means any money you save on gas will actually go directly into your pocket.
Previously, some hybrid vehicle purchases have been eligible for tax deductions. The new credits, however, are subtracted directly from the money you owe the IRS. That makes these credits much more valuable than deductions.
Even though the new tax law covers diesels as well as hybrids, no diesel vehicles will get tax credits in spite of the fact that some get extremely high gas mileage, according to an analysis by the American Council for an Energy Efficient Economy.
The Internal Revenue Service has not officially said, yet, what the tax credits will be, but the ACEEE based its figures on what is currently known about 2006 vehicles and the wording of the law.
The amount of the credit for each vehicle is based on three factors:
First, how large is the vehicle? The amount of the credit is based on the vehicle's fuel economy as compared to a similar 2002 model-year vehicle. To get any credits at all, a vehicle must get at least 25 percent better fuel economy than a similar 2002 vehicle.
A vehicle could also get a smaller credit if it is estimated to save at least 1,200 gallons of fuel over its lifetime.
Vehicles also must meet certain emissions standards to qualify for a tax credit. Regardless of their fuel economy, no diesel vehicles currently meet the emissions requirement for a tax credit.
Toyota Prius
Tax credit shooting star
The Prius will get the second-largest tax credit of any vehicle. Buyers will get $3,150 off their federal taxes. But you'd better not wait too long, because credits on Toyota hybrids will probably start shrinking and, ultimately, disappear sooner than those for other hybrid vehicles.Tax credits for hybrid vehicles sold by any given car company begin to phase out once that manufacturer has sold 60,000 eligible vehicles. Toyota, which sells hybrids under both the Toyota and Lexus brands, will probably reach that limit well before the end of 2006.
Honda Civic GX
Buyers of Honda's natural gas-powered car will be eligible for a $3,600 tax credit, the largest for any vehicle. However, Honda has no plans, currently, to sell the Civic GX outside the state of California.
Ford Escape Hybrid
If you buy a Ford Escape Hybrid or it's sister-vehicle, the Mercury Mariner Hybrid, you'll be eligible for a $2,600 credit for the front-wheel drive version or $1,950 for one with four-wheel drive.
Honda Insight
Buying the two-seat Honda Insight, the most fuel efficient vehicle currently sold in the United States, could get you a $1,450 tax credit. Or it could get you bupkis. It depends on whether you get the car with a manual or automatic transmission. The manual transmission version doesn't meet emissions requirements for a tax credit.
Chevrolet Silverado Hybrid
Chevrolet Silverado hybrid buyers will be eligible for a credit of just $250 reflecting the truck's tiny fuel savings. The hybrid Silverado is really designed to provide electric power at worksites with a small amount of fuel savings thrown in as a bonus.
12-23-05, 03:35 AM
#2
Lexus Fanatic
Interesting. the Toyota Highlander, Lexus RX400H and Honda Accord hybrids are not on the list.
And the article makes a good point....diesels should be on the list, too, but aren't.
And the article makes a good point....diesels should be on the list, too, but aren't.
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