Hybrid Auto Tax Credit

You may well be eligible for a hybrid vehicle tax credit for those who bought a hybrid vehicle in 2008. For the most fuel-efficient models, the credit can be worth up to $3,000. The precise quantity of the credit is dependent upon the make and model of the vehicle and in what state the vehicle was bought.

The Option Motor Vehicle Credit (the name given to the tax credit for hybrid vehicles), is applicable to vehicles bought or put on the road right after January 1, 2006.

To qualify as a hybrid, the vehicle need to have drive trains powered by both an internal combustion engine along with a rechargeable battery. Most hybrid make and models do qualify for this credit- over 40 models. On the other hand, to confirm that your vehicle qualifies, check Form 8910.

Taxpayers might claim the credit on their 2008 tax returns only if they placed a qualified hybrid vehicle on the road in 2008. The credit is only readily available to original purchaser of the vehicle and aren't obtainable to an individual who purchased or leased the vehicle used during the course of 2008.

The credit has been phased out for some hybrid models but is available for new hybrid vehicles that became offered this past year. Following 60,000 hybrid vehicles are sold by a certain manufacturer, the tax credit is reduced and slowly eliminated. To claim the full credit, the vehicle owner ought to file by the end of the third month after the quarter when the manufacturer has reached this limit on sales.

Note: The credit for qualified Toyota and Lexus vehicles was eliminated for purchases on or right after Oct. 1, 2007. The full credit for qualified Honda vehicles was obtainable for all purchases in 2007, but has been decreased for purchases on or right after Jan. 1, 2008.