I am seriously p.o.'d right now. Looks like I am NOT paying the AMT, yet I am still only getting a $650 deduction. That's because I bought a house in early-2006, so my 2006 mortgage interest created a huge deduction, which resulted in a large refund. The fine print of the alternate vehicle tax credit says that it only applies against taxes you owe and reduces your liability to zero, and then you lose any remaining credit once your liability is zero. Not a single Toyota salesperson mentioned this fine print, which is also rubbing me the wrong way.

Unlike most of you other guys, I never would have bought the TCH without this credit. This $2600 credit was THE ONE AND ONLY deciding factor in selecting this particular vehicle, because I actually don't think that the extra money for the hybrid engine is worth it. "Being green" is not a factor for me, it was all about the bottom line. Without the tax credit, it will take me 10 years of increased gas mileage for me to "pay off" the additional cost of the hybrid. I paid MSRP back in August, but even if I really decided a TCH was the best car for my family, I could have waited until the street price dropped after Sept 1, since I'm not getting the full credit anyway.

I'll be writing to my congressman. This is the type of stupidity that will make me to never want to buy another hybrid/clean vehicle again.

 

You can't be serious. You are PO'ed because you have a zero tax liability and you expect the rest of us who owe taxes this year to subsidize your vehicle purchase so that you can actually MAKE money on your vehicle purchase.

If this credit was THE deciding factor, as you state, then you should have done a better job in understanding how the tax credit would impact you.

 

it's funny how people that end up not paying any taxes still find a way to complain about taxes...

 

Yesterday I E-filed and getting $1800 of the $2600 rebate back. I'm retired and don't have earned income anymore. I bought my TOH almost on spur of the moment decision. I didn't plan to buy one, but after at test drive , I ordered it. I would have gotten it without the rebate anyway. The tax rebate is icing on the cake. I've have the car 6 months and love it more each day.

 

When I ordered mine 3 weeks ago I didn't even realize I still qualified for the tax credit. So obviously the tax credit had NOTHING to do with my buying the car.


Flopshot - Just enjoy the car. If the credit issue bothers you that much then sell the car now before it loses even more value and get what you want.

 

I posted a topic on this back on 9*28*2006. The hybrid tax credit is "non-refundable" meaning you cannot use it to increase your income tax refund. I found that out with research of my own in late September when I was evaluating my tax liability for 2006.

What I did (pat on back now) was to reduce the amount of withholding coming out of my pay so that I would "owe" at least $2600 and be able to use the tax credit to cover up the deficit.

It worked great for me. Too bad more people did not know about it in time.

It wasn't a bait and switch at all; it was a non-refundable credit from the start.

 

The question asked in this thread is if you felt like you were a victim of bait and switch. The point of the thread is not to state if you felt someone else was deserving or not deserving of the credit. If you feel I don't deserve the credit, then you should probably also state how everyone else who has to pay AMT should not be complaining, because the sole purpose of the AMT is so people with higher incomes don't find all kinds of tax credits to end up with no liability. Those people are trying to "get around the system" much more than I am. So should I have done a better job of understanding all the implications of the tax credit? Absolutely, this is no-ones fault but my own. But should the IRS page have been crystal clear (which it wasn't) and should Toyota have not pushed a 1-sided story about tax credit on me? 100% absolutely as well, which is why I feel this is a bait&switch. Both of those organizations led me to believe that I would receive the full credit under all circumstances.

 

I think using "bait and switch" is a poor choice in this matter. Bait and switch refers to the action of "baiting" someone with one advertisement then "switching" the item for something different.

In this case, the tax credit never changed. It was "always" non-refundable. There was never a time when it was refundable and then changed to non-refundable.

This information could be found on the web eariler in the year, before I found it in September.

Like I have said before, I think it is and will be in the future a mistake for anyone to buy a hybrid car "just for the tax credit alone." This action to me implies that the buyer does not think the hybrid technology is worth the price they are paying and they are being swayed by tax money to buy something they would not really buy if the item had to stand on it's own merit.

As a hybrid advocate and owner since July 2004, I do not like an attitude like that. If you believe in the technology and want to either save gas or reduce pollution, then buy a hybrid vehicle.

But if you bought ONLY because of the tax break, I think you bought for the wrong reasons and I really can't muster any empathy for your situation. Sorry, but that's my honest take. Nothing personal toward any one individual - I think any and all of the people who bought only for the tax break made a mistake.

 

No, that is incorrect. It has virtually nothing to do with the amount of your tax refund. Your tax refund (or amount owed) is entirely the difference between what your tax bill is and how much of that tax bill you have already paid through withholding. The hybrid tax credit only effects your tax bill and has nothing to do with your withholding. Similarly, the AMT is in no way affected by how much you have withheld.

For example, if your non-AMT without the hybrid credit tax bill is $3000, and your AMT bill is $1500, and your withholding for the year was $3500, then your non-AMT with the $2600 hybrid credit is $3000-2600 = $400. However, since your AMT bill is $1500, you will pay $1500, meaning you only get to use $1500-400 = $1100 of the credit (in other words, the AMT took away all but $400 of the hybrid credit). You will get $3500-1500 = $2000 refund. However, without the AMT, you would have gotten a $3500-400 = $3100 refund. Without any hybrid credit, you would have gotten a $3500-3000 = $500 refund.

When your non-AMT tax bill is at least $2600 greater than your AMT tax, then you will get ALL of the credit, regardless of how much withholding you have. (Unless, you withheld so little that you get fined for too little withholding, in which case the credit will reduce the amount of fine you end up paying!)

-- Alan

 

I beg to differ....

If you read the article I posted a link to back in September, it clearly explains that the tax credit is "non-refundable." Which means it cannot EVEN BY ONE DOLLAR increase the CASH REFUND you get from the IRS. Regardless of AMT situation.

In an non-AMT situation, if you end up with all your other tax obligations with a $500 refund, the hybrid tax credit will be lost to you completely.

It will apply only if you OWE taxes - at that point it can reduce the amount you owe by the amount of the credit you receive. If you owe $500 but your tax credit is $2,100, then the other $1600 is lost to you, not refunded to you.

The hybrid tax credit CANNOT increase your refund under any circumstances. Is it "non-refundable" meaning it cannot be re-funded back to you in the form of a refund.