Hybrid vehicle credit

[Unregistered]

There is no credit in 05, it starts in 06. For 05 (cars bought in 05), there is still the clean fuel deduction of 2000 on the front page of the 1040 under adjustments to income. Toyota gives an 8 year warrenty on the batteries, even if you did not get the extended warrenty. Good point, time will tell as to how long these batteries last; but I for one am willing to be a pioneer here, as we need these cars bad, for both pollution as well as reducing our dependence on foreign oil.

Publication 535 chapter 12 states that the credit was scheduled to be reduced for 05 but the full deduction and credit are now allowed for qualified property placed in service in 2004 and 2005. the entire article is very confusing.....

[Unregistered]

Look at chapter 12 of Publication 535. the first two sections say that you can still take the credit of 10% this year.. I was confused until someone pointed this out. It was suppose to go away.

[Bees Knees]

TTB 1-10 says both the clean-fuel vehicle deduction and the electric vechicle credit are allowed for tax years prior to 2006. Starting in 2006, the clean-fuel deduction goes away, and the electric vehicle credit is reduced from 10% to 2.5%.

Both of these provisions were scheduled to be reduced in 2005, but that was changed by the new law that introduced all the new energy efficient vehicle credits starting in 2006.

[John of PA]

05 Credit is ALL Electrics only

TTB 1-10 says both the clean-fuel vehicle deduction and the electric vechicle credit are allowed for tax years prior to 2006. Starting in 2006, the clean-fuel deduction goes away, and the electric vehicle credit is reduced from 10% to 2.5%.

Both of these provisions were scheduled to be reduced in 2005, but that was changed by the new law that introduced all the new energy efficient vehicle credits starting in 2006.

The 10% credit mentioned, allowed in 05, is a different credit than the new Hybrid credit that starts in 06. The 05 credit is for electric cars that are all electric and use no gas at all. (not Hybrids) (Toyota RAV 4, Chevy S10 Pickup's, Ford Ranger Pickup's, and GM EV1) These vehicle are sold to corporate fleets only and cannot be bought by the general public. And even for fleets, the auto companies are phasing them out and halting production (why, I find puzzling).

[Unregistered]

Hybrid

IRS and Treasury Provide Guidance to Hybrid Manufacturers Dated Jan.13, 2006

http://www.irs.gov/newsroom/article/0,,id=153172,00.html