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Take Credits for Hybrid Vehicles

A light-duty hybrid vehicle tax credit is currently available to individuals for personal, business or trade use.

When you purchase a hybrid electric vehicle or diesel vehicle, you qualify for a IRS tax credit. The Toyota Prius, Honda Insight, Honda Civic Hybrid, Honda Accord Hybrid, Ford Escape Hybrid, Mercury Mariner Hybrid, Chevrolet Silverado Hybrid, GMC Sierra Hybrid, Lexus RX 400h, and Toyota Highlander Hybrid currently qualify for this credit. Consumers who purchase one of these hybrids are eligible for up to $3600 in federal tax credit, the specific amount depending on the vehicle. This tax credit became available in January 2006 and will be available for the first 60,000 hybrid and alternative energy vehicles sold by each company, after that the credit will be phased out.

More information about this credit is available on the ACEEE website.

If you purchased a hybrid before January 2006, you may be eligible for a a "clean fuel" IRS tax deduction of $2,000.

Further background on this deduction is contained in the following Us Department of Energy publication: http://www.ott.doe.gov/hev/pdfs/032873mFS_TAX_FS2.pdf

For more information on the deduction and how to apply for the credit please visit: http://www.fueleconomy.gov/feg/tax_hybrid.shtml.

Background information on both the tax credits and deductions is available on the EPA's fuel economy website.