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Introduction
For such a small number of cars, hybrids sure have had a big impact on the world. More specifically, it's the hybrid powertrain, and it has changed the way we think about cars and even what we're willing to drive. That's especially true when you peek at what's coming: hybrids aren't just for commuters anymore, but for everyone, including those who must drive big SUVs. Starting now and heading into the future, we're getting more hybrids across all sorts of vehicles and more realistic hydrogen fuel cell development. Honda's FCX Clarity, for example, is actually being leased to select motorists in southern California.
--Staff
Photo Credit: Staff, Automakers.
Continue to What's Next: Hybrids...and Hydrogen Review from MyRide.com
Hybrid Car Tax Credit
The Energy Policy Act of 2005 replaced the clean-fuel burning deduction with a tax credit. A tax credit is subtracted directly from the total amount of federal tax owed, thus reducing or even eliminating the taxpayer’s tax obligation. The tax credit for hybrid vehicles applies to vehicles purchased or placed in service on or after January 1, 2006.
The credit is only available to the original purchaser of a new, qualifying vehicle. If a qualifying vehicle is leased to a consumer, the leasing company may claim the credit.
Hybrid vehicles have drive trains powered by both an internal combustion engine and a rechargeable battery. Many currently available hybrid vehicles may qualify for the tax credit.
This reflects a decrease in the credit amount as of Oct. 1, 2006, due to the manufacturers meeting quarterly sales of 60,000 qualified hybrid cars — See Quarterly Sales, below.
This credit amount does not phase out. The full amount of the altenative fuel vehicle credit would be available for vehicles purchased on or before December 31, 2010.
Quarterly Sales
Consumers seeking the credit may want to buy early since the full credit is only available for a limited time. Taxpayers may claim the full amount of the allowable credit up to the end of the first calendar quarter after the quarter in which the manufacturer records its sale of the 60,000th hybrid passenger automobile or light truck or advance lean burn technology motor vehicle. For the second and third calendar quarters after the quarter in which the 60,000th vehicle is sold, taxpayers may claim 50 percent of the credit. For the fourth and fifth calendar quarters, taxpayers may claim 25 percent of the credit. No credit is allowed after the fifth quarter.