Unless you're a millionaire, you might not get IRS tax credit for owning a Prius
McQuarrie says the "bizarre legislation" started with the energy bill that Congress passed in 2005. One of the incentives was a tax credit beginning in January 2006 for those who purchase an approved gas-electric hybrid vehicle. The Toyota Prius received the top break of up to $3,150, which drops according to the number of vehicles sold.
But families who earn between $150,000 and $500,000 might not see a dime of any credit. Those over $750,000 have a good shot at the credit. A quirk in the legislation says a household can't get the credit unless the regular tax obligation exceeds the Alternative Minimum Tax. Bottom line: the Republican Congress in its rich-get-richer manifesto reserved the tax credit for those who pay a lot of taxes. Dual-income families that can make the most of the hybrid are likely shut out.
McQuarrie's report is detailed beyond my simple accounting background. I suggest hybrid owners who are not millionaires to read it before expecting your tax preparer to save you some money.
[Source: Edward F. McQuarrie / San Francisco Chronicle]
- Great used cars for less than $10,000
- Owners say these cars aren't very good deals
- New Car Buying Guides
- Cheapest new automobiles in America
- Fastest-depreciating cars in the United States
- Find and compare 2017 Models