Hybrid Car Tax Break

Hybrid car tax break is a way for the government to steer the consumers to support an environmentally friendly car technology that is still expensive to manufacture.

The wave of tax incentives on federal and state level started in 2006, as hybrids purchased or placed into service after December 31, 2005 were eligible for a federal income tax credit of up to $3,400 by new legislation.

However, these credit amounts begin to phase out for a given manufacturer once it has sold over 60,000 eligible vehicles.

This is why Toyota hybrid cars are no longer within the tax break scheme, and have not been since Oct. 1, 2007, when the phase out was complete.

You can see the updated list on the Environmental Protection Agency's website for fuel efficient cars at

fueleconomy.gov/feg/tax_hybrid.shtml

In addition to federal incentives, there are some state and local governments that also provide incentives for hybrids.

You can check if these incentives are available with your state or local government or view the U.S. Department of Energy's list of State & Federal Incentives & Laws at

www.eere.energy.gov/afdc/incentives_laws.html


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