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Deadline for Hybrid tax credit interpretation. Others agree?

Hi Folks,

From the IRS:

Consumers seeking the credit may want to buy early since the full credit is only available for a limited time. Taxpayers may claim the full amount of the allowable credit up to the end of the first calendar quarter after the quarter in which the manufacturer records its sale of the 60,000th vehicle. For the second and third calendar quarters after the quarter in which the 60,000th vehicle is sold, taxpayers may claim

50 percent of the credit. For the fourth and fifth calendar quarters, taxpayers may claim 25 percent of the credit. No credit is allowed after the fifth quarter.

My interpretation of this is that buyers actually have over a quarter AFTER the 60K limit is hit by a manufacturer to take advantage of the full tax credit. Thus, in practice, the full credit applies to something over 60K vehicles from the same manufacturer. So, until the IRS actually announces a particular manufacturer has sold 60K qualifying vehicles + up to 2 quarters minus one day, you can still get the full credit.

Agree? Disagree?

Also, a question: what date is used to determine qualification for the credit? The date of purchase or the in-service date (which could be the same, but not necessarily)?

Tnx,

C
Reply to
CB
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Yes, the full credit for hybrid vehicles is through the quarter after the quarter in which a manufacturer sells 60,000 units from the Jan. 1,

2006 start date. Then it is 1/2 of the full credit for another 2 quarters. Then it is 1/4 of the full credit for another 2 quarters. Then no more credit. Toyota has a pretty little graph on their estimates here:
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Unfortunately, both Toyota and Lexus together will count for the hybrid sales, so the following vehicles would count: Toyota Prius Toyota Highlander Hybrid Toyota Camry Lexus RX400h Lexus GS450h

Amount of credit for the Toyotas/Lexus depend on model:

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6048,00.htmlhttp://www.irs.gov/newsroom/article/0,,id6381,00.html I expect the April/YTD sales figures to be published any day now from Toyota/Lexus/Scion.
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(or wait for me topost a summary, as I eventually get to it each month...)

Reply to
mrv

Does anyone know the details of what kind of paperwork I will have to provide to the IRS? When I bought my 2004, the dealer gave me a form which I sent in with my taxes. I bought my 2006 in early January and the dealer had no information on the tax exemption.

Kari

Reply to
kari

I used TurboTax this year. It asked me if I had purchased a qualifying vehicle. When I responded yes it calculated my deduction. Next year I'm thinking it will calculate the credit for those who can respond that their purchased their 2006 before the limit was reached. In my case, no additional forms were required.

Reply to
Bill

You don't have to provide any kind of paperwork; you just put it on the proper line of the tax return. That's all you needed to do with your

2004 model as well; you didn't need anything from your dealer.

However, if you get audited, you will need to show the auditor your bill of sale to prove that you bought the car, and the date you bought it. That's all.

-- Michelle

Reply to
Michelle Steiner

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