IRS Extends Tax Credits For Fuel Efficient Vehicles
The US Internal Revenue Service (IRS) has acknowledged certifications by manufacturers
that certain advanced lean-burn technology vehicles qualify for the alternative
motor vehicle tax credit.
Before, only hybrid vehicles, fuel cell vehicles and alternative fuel vehicles
had been certified, but now certain advanced lean-burn technology vehicles,
which generally run on diesel fuel have been certified. These vehicles are passenger
cars or light trucks with an internal combustion engine designed to operate
primarily using more air than is necessary for complete combustion of the fuel.
The vehicles also must incorporate direct fuel injection technology and achieve
at least 125% of the 2002 model year city fuel economy rating. Available credit amounts may vary and include a base credit amount based on
fuel economy compared to the 2002 model year city fuel economy rating and an
additional amount based on the vehicle’s lifetime fuel savings. For a
taxpayer to claim the credit, the original use of the vehicle must begin with
the taxpayer and the vehicle must be acquired for use or lease by the taxpayer
and not for resale. The alternative motor vehicle tax credit was enacted by the Energy Policy Act
of 2005 under Internal Revenue Code Section 30B and includes the advanced lean-burn
technology motor vehicle credit and the qualified hybrid motor vehicle credit.
The credit amounts on the qualifying range from USD900 to USD1,800. There is a limitation on the number of qualified hybrid and advanced lean-burn
technology vehicles eligible for credit. The phase-out period begins when a
manufacturer sells 60,000 qualified hybrid and advanced lean-burn technology
vehicles. 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 hybrid passenger automobile or light truck or advanced
lean-burn technology motor vehicle. For the second and third calendar quarters
after the quarter in which the 60,000th vehicle is sold, taxpayers may claim
50% of the credit. For the fourth and fifth calendar quarters, taxpayers may
claim 25% of the credit. No credit is allowed after the fifth quarter. .
|
|
IMPORTANT NOTICE: THE LOWTAX NETWORK has taken reasonable care in sourcing and presenting the information contained on this site, but accepts no responsibility for any financial or other loss or damage that may result from its use. In particular, users of the site are advised to take appropriate professional advice before committing themselves to involvement in offshore jurisdictions, offshore trusts or offshore investments. All materials on this site copyright THE LOWTAX NETWORK 1999 to 2009. Contact us for further information.