|Hybrid Car Video|
New Hybrid Car Tax Credit
The new energy bill allows a $400 to $3400 tax credit depending on model. A credit is much better than a deduction since a tax credit directly reduces taxes owed, as opposed to simply reducing taxable income.
On A Per Automaker Basis, Tax Credit Begins Slow Phase Out Once 60,000 Hybrids Are Sold. The tax credit is set to expire in 2009, but for many hybrid models the incentive will end much sooner.
Once an automaker has sold 60,000 hybrid vehicles the tax credit for that automakersí hybrids is slowly reduced over the next five consecutive quarters.
Hybrid Car Tax Credit Phase-Out Details
Beginning January 1, 2006 and up through the quarter that the automaker sells 60,000 hybrid vehicles, 100% of the credit is allowed.
100% of the hybrid car tax credit continues for the next consecutive quarter.
The next two quarters after that, the tax credit is reduced to 50% of the original hybrid