Apparently
a hybrid car will help you save more than just gas money. I recently heard on a
morning news show that there is a tax credit called the “Alternative Motor
Vehicle Credit” for the year of 2006. (Yes, this news comes a bit late, but you never know if people may be doing some back taxes... they may as well be 'in the know!')

I
wanted to blog on this topic and hopefully let people know about it, but to
figure out the qualifications needed to be able to take advantage of this you
should probably see your own tax accountant.

What
I found online was that there are two types of credits, ranging from $250 to
$3,400 that are deducted from your final tax bill.

The
auto manufacturers are to give the IRS certification that its hybrid vehicles qualify
for credits. This is then passed from the manufacturer to the dealer to the
customer. Under the current plan, only a certain number of vehicles will
qualify for the full tax credit.

The
example I saw was this:

“Toyota sold 107,897 Priuses in 2005. Under
the new tax rules, only the first 60,000 of Toyota's hybrid products sold are eligible
for the full credit.”

The information I heard on the news show said that after 60,000 of
a specific hybrid model are sold, the tax credit becomes available at a reduced
rate. For 6 months after the 60,000^th was sold, 50% of the credit
amount is available. For the six months following that, 25% of the credit is
available. After one year of reduced credits, the incentive will no longer be
available for that particular vehicle.

Again, I’m no accountant… so
you’ll really want to do some further investigating. One thing I hadn’t seen
information on is do you get your credit if you purchased your car BEFORE 2006?
If you happen to know, leave me a comment. I’d love to know!

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