I think that's not completely accurate. After 60,000 vehicles the credit doesn't disappear. I think it gets cut in half. But in 2006 the only people impacted by this will be buyers of Toyota hybrids, because Toyota sells many more than 60,000 hybrids a year. Anyone who buys an HCH any time in 2006 can expect to get the full credit.

So how will the IRS know when to draw the line? At some date in the near future, let's say on April 15th (oh the irony), Toyota reports to the IRS that they have sold 60,000 hybrids since January 1st. When people file their taxes next year the form will tell them that if they bought a Prius between January 1 and April 15, 2006 they are eligible for a $3,100 credit. If they bought their Prius after April 15 they get only a $1,550 credit.

 

The full credits will remain available for the next calendar quarter following the quarter in which the 60,000th vehicle is sold. For the subsequent two quarters, the incentive will be 50% of the full amount. For the two quarters after that, the incentive will be 25% of the full amount. After four quarters (one year) of reduced credits, the incentives will no longer be available for vehicles sold by that manufacturer.

Source: www.energytaxincentives.org

 

Moosh,
Thanks for the tip on the tax credit. I used to live near Pontiac, MI. I'm wondering how you're doing for mileage in your HCH? I'm near Buffalo, NY now - we get similar temps. Are you in the HCH Database on the GH site? I've noticed that the "mileage aces" tend to be from CA, FL, NM, & TX.
Regards,

 

Warmer temps I have to think.kevin

 

I'm still on my first tank. The display says 42 MPG, which leaves me slightly disappointed.

Outside temp makes a big difference. On the warmest day last week it got 53 MPG in the morning, it was getting 43 MPG every other day.

 

OK not to sound like a total dimwit ,but , is there any paperwork or forms I should be downloading or calling for to implement the 06 tax credit? or do I just bring my proof of purchase/ownership to my accountant next year?do i need to get in touch with my Honda dealer? don't want to wind up having a big "DOH"<---homer simpson moment by not having proper paperwork.

cheers
Gary

 

Let me make sure I get this straight. Before applying the hybrid tax credit to my 2006 taxes early next year, I should owe the government approximately at least $2000 (or whatever the credit is for my car). That way I can get the full benefit for the tax credit. Is this correct? If so, I need to change my withholdings.

 

Yes that it true.
You will owe about $2100 less in Federal tax.
BTW you don't HAVE to change your withholdings.
If you don't your refund will just be about $2100 larger for tax year 2006.

Personally I do what you do.
I like to write a small check every April 15th.
That way I get the use of my own money all year.
Uncle Sam doesn not pay me interest to borrow my money.

 

I'm confused then. For the past couple years, I've always owed about $400 in federal taxes. I'm thinking I should owe more to get the full credit. Am I correct in stating that if I owed the feds nothing, the government isn't going to give me a $2000+ refund when I apply the hybrid credit?

Meh. I think we need a FAQ for this

 

No. Snce this is a 2006 Tax year credit (i.e taxes you pay in early 2007), the IRS will probibly not have a lot of information untillater this year. Like other tax credits, you just need to complete the appropriate sections of next years tax forms and have the proof, should the IRS elect to challange your request.