What You Need To Know About Tax Credit For Hybrid Car

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Author: Anton Rowd

Article source: http://www.articledeshboard.com/. Used with author's permission.

Today, there is a growing number of fuel-saving hybrid cars being sold in the market. Because of this, the government is therefore obligated to apply taxes. For those interested in buying hybrid cars though, there is good news. The Internal Revenue Service has already qualified a number of hybrid car brands for tax credit. For purchasers, this might actually be a good idea. The government's proposal of this tax credit for hybrid car goods is possibly one of the best incentives yet.

What It Is

Tax credit for hybrid car credits simply means that qualified vehicles that were purchased on or after January 1, 2006 are eligible for a tax credit ranging from $400 to $3,400 based on fuel economy. This tax credit may not last long, however, and really does depend on the demand for new hybrid cars or other vehicles. Now what this means is that tax credits may phase out much quicker than expected once manufacturers hit a particular number of hybrid units sold. Less popular brands, of course, will be affected to a lesser extent if sales do no rise too fast.

Qualified Models

The IRS came up with a list of all qualified hybrid cars that can be eligible for tax credit. This includes cars that were sold after January 1 2006 and the list even includes cars that are due out in 2008. Here is a tax credit for hybrid car list for 2007 hybrid cars and their respective tax credit amounts:

2007 Chevrolet Silverado (2WD): $250.00 2007 Chevrolet Silverado (4WD): $650.00 2007 Ford Escape 4 WD Hybrid: $1,950 2007 Ford Escape Front WD Hybrid: $2,600 2007 GMC Sierra (2WD): $250.00 2007 GMC Sierra (4WD): $650.00 2007 Honda Accord Hybrid AT: $1,300 2007 Honda Accord Hybrid Navi AT: $1,300 2007 Honda Civic GX compressed natural gas vehicle: $4,000 2007 Honda Civic Hybrid CVT: $2,100 2007 Lexus GS 450h: $1,550 2007 Lexus RX 400h 2WD and 4WD: $2,200 2007 Mercury Mariner 4 WD Hybrid: $1,950 2007 Nissan Altima Hybrid: $2,350 2007 Saturn Aura Green Line: $1,300 2007 Saturn Vue Green Line: $650 2007 Toyota Camry Hybrid: $2,600 2007 Toyota Highlander Hybrid 2WD and 4WD: $2,600 2007 Toyota Prius: $3,150.

New Cars Only

The government may offer a tax credit for hybrid cars, but limitations still apply. For instance, only hybrid cars that are new are qualified for a tax credit. When a buyer purchases a hybrid car, it must not be a used car. Furthermore, hybrid cars that have been purchased by the buyer cannot be sold again. You must buy a hybrid car only for personal or business use, and not for any other purpose.

Your income tax liability will be lowered through the tax credit offered. Any leftovers are not allowed to go over to the subsequent year. The government is endorsing more cars that save energy and are safe for the environment by giving buyers benefits. These benefits include being able to save more on gas as well as through tax breaks.

For a more complete list of hybrid car prices and more news on tax for hybrid car, log on to Anton Rowd's website on hybrid cars.