Tens of thousands of taxpayers have purchased hybrid electric vehicles this year, and the thousands more who plan to buy these gas-saving, environmentally-friendly vehicles in coming year will receive a bigger tax incentive than expected for their socially-responsible purchases, thanks to yesterday's action by the U.S. Congress on the middle class tax cut bill.

As part of that measure, Congress restored the alternative-fuel and hybrid vehicle federal income tax deduction to $2,000 for vehicles purchased in calendar years 2004 and 2005. (Under current law, the value of the deduction was to have been reduced by 25 percent, to $1,500 this year, and reduced by an additional 25 percent in 2005.) The value of the deduction in 2006 remains at only $500, as under current law, and the deduction continues to sunset entirely at the end of 2006.

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Hmm...sounds like a politician purchased a hybrid

 

NO MATTER! I GET MY TAX DEDUCTION AS HIGH AS IT WAS IN 2004 NOW!!!

 

Very cool....I'm all for that...

 

The federal deduction is stilla 1 time deduction tho, isn't it?

(hoping the answer is no so I can take another 2k deduction!)

 

One time deduction for the original buyer only.

If you buy a used one, you cannot claim the credit.

 

After further review of the $2000 deduction... The only 05' vehicle that has been certified by the IRS to be eligible for the deduction is the Prius. I sure hope the 05' HCH is added to that list as I purchased one in October.