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Thread: Tax Credit/Deduction?
03-16-2006 12:29 PM #21
Article looks correct still.
"maximum hybrid tax credit" =
"Regular income tax liability
minus the total of these other tax credits
minus the *tentative* minimum tax calculated under the AMT rules."
Let's say regular income tax liability is 10k and to make it easy the total of other tax credits is 0. Now if the *tentative* minimum tax (not the AMT that is added in the 1040) is 8k, then 10k - 8k leaves 2k meaning that the maximum hybrid credit is 2k. If the *tentative* minimum tax is 12k, then 10k - 12k leaves 0 so the maximum hybrid credit is 0.
And anytime the impact is to the tax liability, it's a credit whereas impact to taxable income is a deduction. This hybrid credit is a credit and not a deduction.
03-16-2006 06:49 PM #22
Can you cite any specific IRS instructions, form, or other federal document that supports your claim that the credit is limited in this manner ?
I've been trying to find one, but all I find is an IRS statement indicating that any such guidance has yet to be issued.
03-17-2006 08:58 AM #23
I know what you are getting at and I had the same question.
I haven't seen the IRS issue any detailed guidelines other than to say "(2) the rule preventing the credits from being used to reduce alternative minimum tax liability;" at http://www.irs.gov/irb/2006-06_IRB/ar11.html.
However, the tax bill (which is what the IRS uses to create their instructions) does cover it but it's not easy reading. At http://www.taxalmanac.org/index.php/...vehicle_credit, Search for (g) Application With Other Credits then (2) PERSONAL CREDIT
(2) PERSONAL CREDIT- The credit allowed under subsection (a) (after the application of paragraph (1)) for any taxable year shall not exceed the excess (if any) of--
(A) the regular tax reduced by the sum of the credits allowable under subpart A and sections 27 and 30, over
(B) the tentative minimum tax for the taxable year.
03-18-2006 04:09 AM #24
I have answered Mike's question over at:
Thanks for referencing my Web site. I am doing my best to stay on top of the new hybrid credit.
03-25-2006 10:26 AM #25
This is America....free competition...why do hybrids
get a taxincentive (read refund from other taxpayers)
suvs gets excemption from compliance to pollution
controls and also excemption from gas guzzler tax!!
Poor guy in a fuel efficient Civic cant drive in the
HOV lane while a fuel wasting hybrid-suv can!!!
Oh that really make sense.
03-25-2006 02:39 PM #26
A fuel efficient gas Civic has the same HOV lane privileges as a fuel wasting hybrid-suv. Nothing more and nothing less
03-31-2006 10:36 PM #27
Regarding the first question about a 2006 Honda Civic Hybrid bought in 2005. Yes, those of us in that situation are NOT eligible for ANY tax credit. I just got off the phone with the IRS. I'm pretty upset about this as we would have been eligible if we had bought a 2005 model in 2005 or a 2006 model in 2006. I know it won't change anything, but I think I'll be writing a letter to my state's congressional representative -- it just seems like such an oversight. I'm also pretty upset at at the dealership as I specifically inquired about the tax credit on the 2006 Honda Hybrid Civic. Of course, I know that's not their area of expertise and they were just trying to make a sale. As the saying goes, "buyer beware."
04-04-2006 04:51 PM #28
How about the issue of business miles for a hybrid. Right now the IRS gives 48.5 cents per mile for business use of the vehicle. Does that apply to all cars - those that get so much more per mile and those that eat up every drop of gas as the wheels turn?
04-04-2006 10:53 PM #29
I am expecting delivery on a '06 Prius any moment. The dealership has not been at all helpful in helping to understand how this tax credit works, and in fact I was told that I could file for it before the next tax cycle and get money (Yes, actual cahs) back. That seemed fantastical, but I know little about the difference between credits and other incentives (although I get deductions, et all).
So, my question: This is obviously not true given the talk on this board, correct?
Nicole in Michigan
04-06-2006 12:24 AM #30
If you bought a 2006 car in 2005, you would not get the credit, but you should get the deduction on your 2005 taxes.
If you bought a 2006 in 2006, you should be getting your money with next year's tax return. I don't see how it is possible to file early and get the money (especially since they haven't finalized the tax credit amounts yet).