The Senate has approved a sweeping energy bill that includes a provision for a rather substantial tax credit for plug-in hybrids. Of course, the bill still needs to make it through the House, so there's no reason for PHEV proponents to get too excited just yet. The tax credits have a range of $2,500 to $7,500 and the actual dollar amount depends on the available capacity of the vehicle's battery. We are still waiting for all the details, as these things tend to be hugely complicated, but early indications are that the Volt from GM would be the only vehicle currently announced that would qualify for the maximum credit. Toyota voiced some dissent regarding that point, and we don't yet know if any changes were made. Of course, if Chrysler is able to get some of its new concepts into production, it may also qualify.

Current hybrid tax credits expire for a manufacturer after it has sold 60,000 vehicles. The new legislation allows for 250,000 qualifying PHEVs to be sold before it expires, but we are not yet clear on whether it would be phased out on a manufactuer-by-manufacturer basis or just end alltogether. Expect these issues to be made clearer in the near future.


[Source: Automotive News - sub. req'd]

Back on the first of January of this year, Honda's hybrid tax credits began their slide down towards zero due to the fact that the automaker passed sixty-thousand hybrid sales. While you can argue with the reasoning behind the credits in the first place along with the arbitrary number of people who will get them, but the rules are what they are. So, starting on July 1, the tax credit for any Honda hybrid vehicle will be halved yet again, bringing the available credit to just one-fourth of the original level.

As of today, the Honda Civic hybrid gets a credit of $1,050. From July 1 to December 31, that credit will be $525. Don't complain too much, though, as the credit will officially run out on January 1, 2009. Ford, General Motors and Nissan have yet to hit the magic sixty-thousand number, so the full credit still applies for those manufacturers. Toyota hybrids are no longer eligible for any credit at all, as it has sold way too many Priuses to qualify any longer.

[Source: FuelEconomy.gov]

We know that, because of the Prius' popularity, Toyota and Lexus hybrid vehicles will lose their IRS tax credits at the end beginning of October. We've also know it was likely that Honda would finally sell 60,000 hybrids in the U.S. and so begin the mandated halving of IRS tax credits .The IRS and Honda have now announced that this has indeed come to pass (61,625 as of the end of July) and so, starting on January 1, 2008, the tax credits will be sliced in half. Until that day, tax credits are as follows:

• Honda Accord Hybrid Model Year 2005 $650
• Honda Accord Hybrid, Model Year 2007 $1,300
• Honda Accord Hybrid Navi Model Year 2007 $1,300
• Honda Civic Hybrid Model Year 2007 $2,100

For the first half of 2008, these credits will be half of the amount listed. In the second half, take off another 50 percent. Once we get to 2009, unless the laws change, no Honda hybrid will qualify for any IRS tax credits.

Related:

• Year to date sales of hybrid models, Honda close to 60,000 tax-break limit
• 2008 Mazda Tribute hybrid SUVs will qualify for tax credit
• Where federal rebates for Toyota and Lexus hybrids stand as of Oct. 1, 2006

[Source: IRS, Honda]

Gonna have to come clean, here. When the 2008 Mazda Tribute hybrids (2WD and 4WD) were approved for some fat tax credits from the U.S.' s Internal Revenue Service back in early July, it slipped by the AutoblogGreen radar. But the EDTA brought it to our attention through their newsletter and we went and checked it out. 'Tis true.

So, what's the deat? Well, basically the U.S. government would love to help you feel green by driving a hybrid SUV. In the Tribute's case, you can get either $3,000 (by buying the 2WD version) or $2,200 (the 4WD). Like the all other IRS hybrid tax credits, this amount will drop after Mazda reports it has sold 60,000 hybrids. Anyone want to guess when that will be?

[Source: IRS]

Woefully short of details, but about a topic we're sure to know more about soon, this article from the Louisville Courier-Journal says that sales of Toyota Motor Company's hybrid vehicles peaked at the end of September as buyers tried to get their hands on a Prius or a Camry or Highlander hybrid (or, of course, a Lexus RX 400h or GS 450h) before the tax credits for those vehicles was cut in half on Oct. 1. The news comes from a Toyota spokesperson. The reason Toyota's hybrids had their credits cut in half it the company's dominance of the hybrid market, and because they were the first to reach the 60,000 vehicle sold limit set by law. You can see the updated tax credit rates for TMC's hybrids here. Hybrids from other manufacturers still qualify for the full credit amounts.

[Source: Louisville Courier-Journal]

Just so everyone's clear on where Toyota's hybrid models stand in getting federal tax credits in the United States, here's the way the money lines up for purchases after Oct. 1 (i.e., tomorrow), courtesy of Toyota:

• Toyota Prius: $1,575
• Toyota Camry Hybrid: $1,300
• Toyota Highlander Hybrid: $1,300
• Lexus RX 400h: $1,100
• Lexus GS 450h: $775

These rebates are in effect until April, 2007. On April 1st, 2007 (and continuing until September 30, 2007) rebates for Toyota and Lexus models drops in half to:

• Prius: $787.50
• Camry Hybrid: $650
• Highlander Hybrid: $650
• Lexus RX 400h: $550
• Lexus GS 450h: $387.50

After September 30, 2007, Toyota and Lexus hybrids no longer qualify for IRS rebates. It's unknown at this time whether or not the Lexus LS 600h, which will become available next spring, will qualify for any rebates.

Note: since these credits are from the government, they're not available to all purchasers (like, say, manufacturer's rebates). Check with the dealer or the IRS to see if you qualify.

[Source: Toyota]

American hybrid purchasers get a tax break when they buy one of the fuel-efficient cars. But how easy is it to claim this credit, and just what does one do to do so. Over at the money advice site Bankrate, George Saenz, CPA, answers a reader's question on the credit, although the question is more detailed and helpful than the answer.

The reader, Duke, writes in about purchasing a Prius recently. Since Toyota has sold 60,000 Priuses here in the U.S., the tax credit for the Prius starts to diminish this October. Even with all those vehicles sold, Duke couldn't get much help from the IRS on how to claim his credit and doesn't want to give the IRS an interest free loan by not claiming it. Saenz says Duke still can, and shouldn't have to move money to a Roth IRA to cover himself.

[Source: Bankrate]

American Honda Motor has received its ruling from the Internal Revenue Service on the allowable tax credits for its hybrid cars for the 2006 tax year, and it's good news for car buyers.

The 2006 Civic Hybrid (shown at right accepting its World Green Car award) gets the biggest boost, with a $2,100 tax credit, while the '06 Accord Hybrid and the automatic transmission '06 Insight are eligible for credits of $1,300 and $1,450, respectively.

Only the IRS and your tax accountant know for sure what tax credit you may be eligible for, so check it out before you sign on the dotted line for that new hybrid.

[Source: American Honda]