The New Alternative Motor Vehicle Tax Credit
By: Whitney Ibarra
The Henssler Financial Group Position Paper

The Hensler Financial Group Wealth Management

Beginning in 2006, the Alternative Motor Vehicle Credit will be granted to taxpayers who purchase qualified energy-efficient vehicles, including hybrid vehicles, as well as meet the following requirements:

  • The vehicle must be purchased and placed in service on or after January 1, 2006.
  • Only the original owner may claim the credit; it does not apply to used vehicles.
  • The vehicle must be used predominantly within the United States.

This tax credit replaces the $2,000 clean-burning fuel deduction, which was formerly allowed for taxpayers who purchased new hybrid vehicles before January 1, 2006.

Beware…The Credit Will Phase Out

Taxpayers wishing to take advantage of this credit may want to buy early because the credit has a phase out provision. The full credit may be claimed up to the end of the first calendar quarter after the quarter in which a manufacturer records its sale of its 60,000th vehicle. During the second and third calendar quarters following the sale of the 60,000th vehicle, the credit is reduced to 50%; during the fourth and fifth quarters, the credit is reduced to 25%. No credit is allowed after the fifth quarter following the sale of the 60,000th vehicle.

What Hybrid Vehicles Are Eligible For The Credit?

As of December 11, 2007, the IRS has acknowledged the following vehicles and their credit amounts:

2008 Hybrid Vehicles

Make

Model

Credit Amount

Chevrolet

Malibu Hybrid

$1,300

Chevrolet

Tahoe Hybrid 2WD and 4WD

 $2,200

Ford

Escape Hybrid 2WD

 $3,000

Ford

Escape Hybrid 4WD

 $2,200

GMC

Yukon Hybrid 

$2,200

Honda** 

Civic CVT

Purchase Date

Prior to 1/1/08

$2,100

1/1/08 -- 6/30/08

$1,050

7/1/08 -- 12/31/08

$525

1/1/09 and later

$0

Mazda 

Tribute 2WD

$3,000

Mazda 

Tribute 4WD

$2,200

Mercury

Mariner Hybrid 2WD

 $3,000

Mercury

Mariner Hybrid 4WD

 $2,200

Nissan 

Altima Hybrid

$2,350

Saturn

Aura Hybrid

$1,300

Saturn

Vue Green Line

$1,550

Toyota*

Camry Hybrid

Purchase Date

1/1/06 -- 9/30/06

$2,600

10/1/06 --3/31/07

$1,300

4/1/07 -- 9/30/07

$650

10/1/2007 and later

$0

Toyota*

Prius

Purchase Date

1/1/06 -- 9/30/06

$3,150

10/1/06 --3/31/07

$1,575

4/1/07 -- 9/30/07

$787.50

10/1/2007 and later

$0

Toyota*

Highlander  Hybrid 4WD

Purchase Date

1/1/06 -- 9/30/06

$2,600

10/1/06 --3/31/07

$1,300

4/1/07 -- 9/30/07

$650

10/1/2007 and later

$0

Lexus*

RX 400h 2WD and 4WD

Purchase Date

1/1/06 -- 9/30/06

$2,200

10/1/06 --3/31/07

$1,100

4/1/07 -- 9/30/07

$550

10/1/2007 and later

$0

Lexus*

LS 600h L Hybrid

Purchase Date

1/1/06 -- 9/30/06

$1,800

10/1/06 --3/31/07

$900

4/1/07 -- 9/30/07

$450

10/1/2007 and later

$0

2007 Hybrid Vehicles

Make

Model

Credit Amount

Chevrolet

Silverado 2WD Hybrid Truck

$  250

Chevrolet

Silverado 4WD Hybrid Truck

$  650

Ford

Escape Hybrid 2WD

$2,600

Ford

Escape Hybrid 4WD

$1,950

GMC

Sierra 2WD Hybrid Truck

$  250

GMC

Sierra 4WD Hybrid Truck

$  650

Honda**

Accord Hybrid AT

Purchase Date

Prior to 1/1/08

$1,300

1/1/08 -- 6/30/08

$650

7/1/08 -- 12/31/08

$325

1/1/09 and later

$0

Honda

Accord Hybrid Navi AT

Purchase Date

Prior to 1/1/08

$1,300

1/1/08 -- 6/30/08

$650

7/1/08 -- 12/31/08

$325

1/1/09 and later

$0

Honda

Civic Hybrid CVT

Purchase Date

Prior to 1/1/08

$2,100

1/1/08 -- 6/30/08

$1,050

7/1/08 -- 12/31/08

$525

1/1/09 and later

$0

Lexus*

GS450h

Purchase Date

1/1/06 -- 9/30/06

$1,550

10/1/06 --3/31/07

$775

4/1/07 -- 9/30/07

$387.50

10/1/2007 and later

$0

Lexus *

RX 400h 4WD

Purchase Date

1/1/06 -- 9/30/06

$2,200

10/1/06 --3/31/07

$1,100

4/1/07 -- 9/30/07

$550

10/1/2007 and later

$0

Lexus*

RX 400h 2WD

Purchase Date

1/1/06 -- 9/30/06

$2,200

10/1/06 --3/31/07

$1,100

4/1/07 -- 9/30/07

$550

10/1/2007 and later

$0

Mercury

Mariner Hybrid 4WD

$1,950

Nissan 

Altima Hybrid

$2,350

Saturn

Aura

$1,300

Saturn

Vue Green Line

$650

Toyota*

Camry Hybrid

Purchase Date

1/1/06 -- 9/30/06

$2,600

10/1/06 --3/31/07

$1,300

4/1/07 -- 9/30/07

$650

10/1/2007 and later

$0

Toyota*

Prius

Purchase Date

1/1/06 -- 9/30/06

$3,150

10/1/06 --3/31/07

$1,575

4/1/07 -- 9/30/07

$787.50

10/1/2007 and later

$0

Toyota*

Highlander  Hybrid 2WD

Purchase Date

1/1/06 -- 9/30/06

$2,600

10/1/06 --3/31/07

$1,300

4/1/07 -- 9/30/07

$650

10/1/2007 and later

$0

Toyota*

Highlander  Hybrid 4WD

Purchase Date

1/1/06 -- 9/30/06

$2,600

10/1/06 --3/31/07

$1,300

4/1/07 -- 9/30/07

$650

10/1/2007 and later

$0

2006 Hybrid Vehicles

Make

Model

Credit Amount

Chevrolet

Silverado 2WD Hybrid Truck

$250

Chevrolet

Silverado 4WD Hybrid Truck

$650

Ford

Escape Hybrid 2WD Front Wheel Drive

$2,600

Ford

Escape Hybrid 4WD 

$1,950

GMC

Sierra 2WD Hybrid Pickup Truck

$250

GMC

Sierra 4WD Hybrid Pickup Truck

$650

Honda**

Accord Hybrid AT w/updated calibration*

Purchase Date

Prior to 1/1/08

$1,300

1/1/08 -- 6/30/08

$650

7/1/08 -- 12/31/08

$325

1/1/09 and later

$0

Honda**

Accord Hybrid AT without updated calibration*

Purchase Date

Prior to 1/1/08

$650

1/1/08 -- 6/30/08

$325

7/1/08 -- 12/31/08

$162.50

1/1/09 and later

$0

Honda**

Navi AT w/updated calibration*

Purchase Date

Prior to 1/1/08

$1,300

1/1/08 -- 6/30/08

$650

7/1/08 -- 12/31/08

$325

1/1/09 and later

$0

Honda**

Navi AT without updated calibration*

Purchase Date

Prior to 1/1/08

$650

1/1/08 -- 6/30/08

$325

7/1/08 -- 12/31/08

$162.50

1/1/09 and later

$0

Honda**

Civic Hybrid CVT

Purchase Date

Prior to 1/1/08

$2,100

1/1/08 -- 6/30/08

$1,050

7/1/08 -- 12/31/08

$525

1/1/09 and later

$0

Honda**

Insight CVT

Purchase Date

Prior to 1/1/08

$1,450

1/1/08 -- 6/30/08

$725

7/1/08 -- 12/31/08

$362.50

1/1/09 and later

$0

Lexus*

RX400h 2WD

Purchase Date

1/1/06 -- 9/30/06

$2,200

10/1/06 --3/31/07

$1,100

4/1/07 -- 9/30/07

$550

10/1/2007 and later

$0

Lexus*

RX400h 4WD

Purchase Date

1/1/06 -- 9/30/06

$2,200

10/1/06 --3/31/07

$1,100

4/1/07 -- 9/30/07

$550

10/1/2007 and later

$0

Mercury

Mariner 4WD Hybrid

$1,950

Toyota*

Highlander 2 WD Hybrid

Purchase Date

1/1/06 -- 9/30/06

$2,600

10/1/06 --3/31/07

$1,300

4/1/07 -- 9/30/07

$650

10/1/2007 and later

$0

Toyota*

Highlander 4WD Hybrid

Purchase Date

1/1/06 -- 9/30/06

$2,600

10/1/06 --3/31/07

$1,300

4/1/07 -- 9/30/07

$650

10/1/2007 and later

$0

Toyota*

Prius

Purchase Date

1/1/06 -- 9/30/06

$3,150

10/1/06 --3/31/07

$1,575

4/1/07 -- 9/30/07

$787.50

10/1/2007 and later

$0

2005 Hybrid Vehicles

Make  

Model

Credit Amount

Ford 

Escape HEV 2WD  

$2,600

Ford

Escape HEV 4WD

$1,950

Honda**

Accord Hybrid AT

Purchase Date

Prior to 1/1/08

$650

1/1/08 -- 6/30/08

$325

7/1/08 -- 12/31/08

$162.50

1/1/09 and later

$0

Honda**

Hybrid Navi AT

Purchase Date

Prior to 1/1/08

$650

1/1/08 -- 6/30/08

$325

7/1/08 -- 12/31/08

$162.50

1/1/09 and later

$0

Honda**

Civic Hybrid  CVT

Purchase Date

Prior to 1/1/08

$1,700

1/1/08 -- 6/30/08

$850

7/1/08 -- 12/31/08

$425

1/1/09 and later

$ 0

Honda**

Civic Hyrid MT

Purchase Date

Prior to 1/1/08

$1,700

1/1/08 -- 6/30/08

$850

7/1/08 -- 12/31/08

$425

1/1/09 and later

$ 0

Honda**

Insight CVT

Purchase Date

Prior to 1/1/08

$1,450

1/1/08 -- 6/30/08

$775

7/1/08 -- 12/31/08

$387.50

1/1/09 and later

$0

Toyota*

Prius

Purchase Date

1/1/06 -- 9/30/06

$3,150

10/1/06 --3/31/07

$1,575

4/1/07 -- 9/30/07

$787.50

10/1/2007 and later

$0

* Credit for Toyota/Lexus vehicles are reduced for purchase after 10-1-06.  See IRS Notice 2006-78 for additional information.
** Credits for Honda vehicles are reduced for purchase after 1-1-08.  See IRS Notice 2007-98 for additional information.


The Henssler Financial Group Tax & Accounting Division can assist you with further information regarding the Alternative Motor Vehicle Credit or any other tax related issues. Please call us at 770-428-4025.

 
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