Hybrid Car Tax Credit
Wednesday, December 8th, 2010If you’re considering purchasing a hybrid car, there may be no better time than now. The United States government has had a tax credit in place since 2005 for certain hybrid vehicles. That credit has been extended a couple of times, but is going to be seeing its end on December 31, 2010. Taking advantage of this credit is actually quite a bit more beneficial than just having another deduction on your taxes, as a credit is different than a deduction. A credit will reduce your tax dollar-for-dollar while a deduction simply reduces the percentage of tax owed.
The amount of the credit differs by make and model of car, and some cars which were once eligible no longer are. Each manufacturer was given a certain pre-determined number of vehicles to sell and once that number was hit, the credit for that manufacturer’s vehicles was over. A list of vehicles still available for the credit, and the amount of those credits, can be found here: http://www.edmunds.com/fueleconomy/car-tax-credit.html. According to the Internal Revenue Service, qualifying hybrid vehicles are cars with a gross vehicle weight of no more than 8,500 lbs. and which draw propulsion energy from onboard sources of stored energy, which are an internal combustion engine using consumable fuel and a rechargeable energy storage system. Full-electrics do not fall into this category, however, credits for full electrics may actually run past the December 31st deadline.
Here’s a list of qualifying 2011 hybrid vehicles according to the IRS:
| Model Year | Make | Model | Credit Amount |
| 2011 | BMW | Active Hybrid 750i | $900 |
| Active Hybrid Li | $900 | ||
| Active Hybrid X6 | $1,550 | ||
| 2011 | Cadillac | Escalade Hybrid (2WD & 4WD) | $2,200 |
| 2011 | Chevrolet | Tahoe Hybrid C1500 2WD | $2,200 |
| Tahoe Hybrid K1500 4WD | $2,200 | ||
| Silverado Hybrid C15 2WD | $2,200 | ||
| Silverado Hybrid K15 4WD | $2,200 | ||
| 2011 | GMC | Sierra Hybrid C15 2WD | $2,200 |
| Sierra Hybrid K15 4WD | $2,200 | ||
| Yukon Hybrid C1500 2WD | $2,200 | ||
| Yukon Hybrid K1500 4WD | $2,200 | ||
| Yukon Denali Hybrid K1500 4WD | $2,200 | ||
| 2011 | Mercedes Benz | ML450 Hybrid | $2,200 |
| 2011 | Nissan | Altima Hybrid | $2,350 |
Here’s the IRS list of the 2010 hybrid vehicles that qualify for tax credit:
| Model Year | Make | Model | Credit Amount | NOTE: |
| 2010 | BMW | ActiveHybrid X6 | $1,550 | |
| 2010 | Cadillac | Escalade Hybrid (2WD & 4WD) | $2,200 | |
| 2010 | Chevrolet | Malibu Hybrid | $1,550 | |
| Silverado Hybrid C15 2WD | $2,200 | |||
| Silverado Hybrid K15 4WD | $2,200 | |||
| Tahoe Hybrid C1500 2WD | $2,200 | |||
| Tahoe Hybrid K1500 4WD | $2,200 | |||
| 2010 | Ford | Escape Hybrid 4×2 | $3,000 | If purchased before 04-01-09: Full Credit Amount |
| $1,500 | If purchased on 04-01-09 and on or before 09-30-09 Credit is 50% ($1500) | |||
| $750 | If purchased on 10-01-09 and on or before 03-31-10 Credit is 25% ($750) | |||
| Escape Hybrid 4×4 | $2,600 | If purchased before 04-01-09: Full Credit Amount | ||
| $1,300 | If purchased on 04-01-09 and on or before 09-30-09 Credit is 50% ($1,300) | |||
| $650 | If purchased on 10-01-09 and on or before 03-31-10 Credit is 25% ($650) | |||
| Fusion Hybrid | $3,400 | If purchased before 04-01-09: Full Credit Amount | ||
| $1,700 | If purchased on 04-01-09 and on or before 09-30-09 Credit is 50% ($1700) | |||
| $850 | If purchased on 10-01-09 and on or before 03-31-10 Credit is 25% ($850) | |||
| 2010 | GMC | Sierra Hybrid C15 2WD | $2,200 | |
| Sierra Hybrid K15 4WD | $2,200 | |||
| Yukon Hybrid C1500 2WD | $2,200 | |||
| Yukon Hybrid K1500 4WD | $2,200 | |||
| Yukon Denali Hybrid C1500 2WD | $2,200 | |||
| Yukon Denali Hybrid K 1500 4WD | $2,200 | |||
| 2010 | Mercury | Mariner Hybrid 4×2 | $3,000 | If purchased before 04-01-09: Full Credit Amount |
| $1,500 | If purchased on 04-01-09 and on or before 09-30-09 Credit is 50% ($1500) | |||
| $750 | If purchased on 10-01-09 and on or before 03-31-10 Credit is 25% ($750) | |||
| Mariner Hybrid 4×4 | $2,600 | If purchased before 04-01-09: Full Credit Amount | ||
| $1,300 | If purchased on 04-01-09 and on or before 09-30-09 Credit is 50% ($1,300) | |||
| $650 | If purchased on 10-01-09 and on or before 03-31-10 Credit is 25% ($650) | |||
| Milan Hybrid | $3,400 | If purchased before 04-01-09: Full Credit Amount | ||
| $1,700 | If purchased on 04-01-09 and on or before 09-30-09 Credit is 50% ($1700) | |||
| $850 | If purchased on 10-01-09 and on or before 03-31-10 Credit is 25% ($850) | |||
| 2010 | Mercedes- Benz | S 400 Hybrid | $1,150 | |
| ML 450 Hybrid | $2,200 | |||
| 2010 | Nissan | Altima Hybrid | $2,350 |
There are a few requirements to be met in order to be able to take this credit. First off, the vehicle has to be new, so forget about taking a credit on that great deal your salesman will give you on a lease turn-in. The credit is only available to the original purchaser. In the case of a lease (saying that you are the leaser), the credit goes to the dealership where you purchase the vehicle since they are the ones who will technically still own it. Most dealerships will pass this credit on to their consumers, but you’ll want to check and make sure of that fact before signing any papers.
Second, the credit is a federal tax credit. That means whatever the amount listed for the credit on your vehicle is, that’s the amount you can take from your federal taxes. State tax credits will vary by state. Most states will be offering some type of credit for the purchase, but it will undoubtedly not be matching what you’ll get in federal credit. In states that have no sales tax on vehicles, there will usually be other types of tax credit offered to you. That will also vary by state. The best place to find what your credit will be to check out your state government’s website or your local department of commerce.
Also, if you’re planning on taking the credit and you prepare your own taxes every year, make sure you have Form 8910. This is the form that needs to be filled out for the IRS to make the credit valid. If you have your taxes done for you, it may not be a bad idea to just mention the credit and the form to your accountant. That’s a pretty big chunk of change to miss out on by not being cautious.
Finally, don’t forget to do your homework. Just because a big tax credit is available for a certain vehicle doesn’t always necessarily make that vehicle right for you. Make sure you know everything about what you want from your vehicle before jumping at the extra cash. Don’t forget to check out some of our other articles here on iseecars.com to see which models tested the best before making that trip to the dealer.
Related Car Lists
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- 6-Cylinder Cars with Best MPG for the Money
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