Hi All,

I have read a few posts and am trying to gain a clear understanding of what the 2006 Tax credit is for a Prius purchased in 2006. Let's say, April 2006, since I have put a deposit on one this month.

I think we are under the 60,000 unit quota at this point. Can someone explain how it works? I read that it was a $3150 credit, not deduction which is great. Forgive my ignorance, but is this a one time thing? And, is there anything in particular you must fill out ahead of time? Or come tax time next year, you just get it?

Thanks in advance to anyone who can thoroughly explain how it works.

 

Its a one time thing. I can't answer the other questions.

 

"Consult your tax professional."

Or TurboTax (next year).

 

You know about as much as anybody else. There just isn't a lot of information available. They will probably handle the tax stuff like they did with the 2005 deduction. There was a special place on the 1040, etc.

 

Go to Toyota.com..they have all the information you will need on tax credit. The info is contained in the hybrid section..

$$$$$$$$$

 

It was finally confirmed by the IRS to Toyota that the Prius does qualify for a $3150 tax credit on your 2007 return.. subject to your personal tax situation.. consult your advisor.


Toyota confirmed that they had sold 42175 hybrids through 3-31. Thus every buyer through 9-30 'could' qualify for the full credit subject to personal situations.

 

I think you meant to write "... on your 2006 return". The 2006 return will be due in 2007, of course.

 

Here's a a great link discussing the 2006 tax credit: http://www.fueleconomy.gov/feg/tax_hybrid_new.shtml

Also, the IRS will produce a form or update form 8910 to support 2006 hybrids. They don't have a 2006 form 8910 posted yet, but you can look at the 2005 form here: http://www.irs.gov/formspubs/lists/0,,id=97817,00.html
then choose '2005 Form 8910 Alternative Motor Vehicle Credit' and click the Review Selected Items button.

http://www.taxact.com is a great cheap/free e-file site. I have used them for the past 3 years.

--Matt

 

You have come to the right place. I am a tax professor and just looked into this. First of all, a credit is a straight deduction from you tax bill, unlike a deduction which reduces your income. The credit is likely to be available for any Prius for which one takes delivery through 9/30. The credit does not expire on the 60,000th vehicle sold. One gets the full credit for any Prius delivered in the quarter in which the 60,000th vehicle is sold (likely the one ending 6/30) AND for any Prius delivered in the following quarter (likely the one ending 9/30). After that a credit remains available, but less of one. BUT, the credit does not apply for purposes of the alternative minimum tax, which an increasing number of people are paying. Due to the way the AMT works, and the fact that they have not adjusted the exemptions for inflation (though through 2005 there was a bump up), it now effects more and more upper middle class taxpayers. If they don't fix it, we will ALL eventually be paying the AMT.

 

Are you eligible for TAX CREDIT if you lease? or buy it upfront and possibly can refinance lease laterz?pls advise?