As 2006 rolls along, the IRS is in the process of issuing tax credit amounts to particular hybrid vehicles. The agency has just issued the amounts for a number of GM vehicles.
IRS Issues Tax Credit Amounts For GM Trucks
As part of the Energy Policy Act of 2005, the tax advantages of owning a hybrid vehicle have been seriously upgraded. Prior to the Act, a person that purchased such a vehicle could claim a tax deduction of up to $2,000. While this was nice, the new Act changed the deduction into a tax credit. Tax credits are far better than tax deductions because they are reduced directly from the tax you owe, not your gross income.
Through 2006, the IRS is working its way through various hybrid models and issuing the amount of tax credit that can be claimed for each. Makes include Honda, Toyota, Ford, Lexus and just about every vehicle in the class. On July 11, 2006, the IRS issued a slew of tax credit determinations for hybrid trucks made by General Motors.
If you purchase a new GM hybrid truck, you will now be able to claim a tax credit on your tax returns. The models and amount of the tax credit that can be claimed are as follows:
1. $650 dollars for 2006 GMC Sierra (4WD) hybrid pickup truck.
2. $650 dollars for 2007 GMC Sierra (4WD) hybrid pickup truck.
3. $650 dollars for 2006 Chevrolet Silverado (4WD) hybrid pickup truck.
4. $650 dollars for 2007 Chevrolet Silverado (4WD) hybrid pickup truck.
5. $250 dollars for 2006 GMC Sierra (2WD) hybrid pickup truck.
6. $250 dollars for 2007 GMC Sierra (2WD) hybrid pickup truck.
7. $250 dollars for 2006 Chevrolet Silverado (2WD) hybrid pickup truck.
8. $250 dollars for 2007 Chevrolet Silverado (2WD) hybrid pick up truck.
To claim the tax credit, you must purchase any of the above vehicles from a dealer after January 1, 2006. The vehicle must also be new, not used. As an aside, the tax credit amount will drop after the 60,000th model has been sold, so you may want to buy now if you are considering any of these vehicles.
Tax credits for purchasing a hybrid are a tremendous benefit when it comes to filing your returns. Since the tax credit amount is reduced directly from the amount you owe, it can make for some very nice refunds.
Richard A. Chapo is with BusinessTaxRecovery.com - providing information on
taxes.
