Issue Number: IR-2006-115 Inside This Issue






WASHINGTON — The Internal Revenue Service announced that purchasers of American Honda Motor Company, Inc., qualified vehicles may continue to claim the Alternative Motor Vehicle Credit. The announcement comes after the IRS concluded its quarterly review of the number of hybrid vehicles sold.

The tax credit for hybrid vehicles applies to vehicles purchased on or after Jan. 1, 2006, and it may be as much as $3,400 for those who purchase the most fuel-efficient vehicles.

The Quarterly Report of Qualified Vehicles for the Alternative Motor Vehicle Credit for the quarter ending March 31, 2006, shows that Honda sold 9,072 qualifying vehicles to retail dealers.

The make and model of qualified vehicles sold in the quarter ended March 31, 2006, include:

• Honda Civic Hybrid (SULEV) CVT Model Years 2005 and 2006<
• Honda Accord Hybrid AT Model Years 2005 and 2006<
• Honda Accord Hybrid Navi Model year 2006<
• Honda Insight CVT Model Year 2006<

Consumers seeking the credit may want to buy early because 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.

More information on hybrid vehicles and other alternative motor vehicles can be found at: IRS.gov.

Related Item:

• Hybrid Cars and Alternative Motor Vehicles<