Hybrid Vehicles

With the prices going higher and higher at the pump (sometimes it seems that they jump in mid-pump, doesn’t it?), more and more people are turning to hybrids and alternative fuel vehicles to save money on gas. 

But you could also receive a credit from Uncle Sam for purchasing that vehicle.  Here’s a list of 2008 model vehicles that qualify for the Hybrid credit.  And here’s a list of the Qualified Alternative Fuel Motor Vehicles, and their credit amounts.

According to the IRS, “Consumers seeking the credit may want to buy early since the full credit is only available for a limited time.”

In addition to certification, the following requirements must be met to qualify for the credit: 

• You placed the vehicle in service during your tax year;
• The original use of the vehicle began with you;
• You acquired the vehicle for use or to lease to others, and not for resale; and
• You use the vehicle primarily in the United States.

The deduction 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.

You can report this credit on Form 8910.   

Besides the credit you receive from the Federal government, some states also offer incentives to purchasers of hybrid vehicles.  There’s a complete list of incentives available at the whybuyhybrid website.

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