The
tax
credit
for
some
of
the
more
popular
models
of
hybrid
cars
may
soon
be
shrinking.
The
full
credit
is
only
available
for
the
first
60,000
hybrid
vehicles
sold
by
an
automobile
manufacturer.
For
qualifying
automobiles
placed
in
service
after
January
1,
2006,
the
credit
could
be
as
much
as
$3,400.
In
the
second
and
third
quarters
after
a
manufacturer
meets
the
60,000-vehicle
ceiling
(for
six
months),
taxpayers
may
claim
50
percent
of
the
full
credit.
If
you
purchase
in
the
fourth
or
fifth
quarters
after
the
60,000-vehicle
ceiling,
you
will
qualify
for
25
percent
of
the
full
credit.
After
the
fifth
quarter,
no
credit
will
be
allowed.
As
of
June
30,
2006,
Toyota
and
its
Lexus
subsidiary
had
sold
over
60,000
hybrid
vehicles,
so
if
you
or
your
clients
purchased
a
Toyota
Prius,
Toyota
Highlander
Hybrid,
or a
Lexus
RX
or
GS
Hybrid
they
will
receive
a
full
credit
if
it
was
purchased
by
September
30,
2006,
but
only
50
percent
if
after
this
date.
In
addition
to
Toyota
&
Lexus,
Honda,
some
GM
models
and
some
Ford
&
Mercury
Models
also
qualify
for
the
credit.
See
www.irs.gov
and
put
Hybrid
Vehicles
Tax
Credit
in
the
search
for
more
information.
There
is
pending
legislation
that
may
provide
even
greater
tax
credits
for
2007.
Keep
posted.
For
more
information
and
detailed
credit
amounts
for
each
automobile
manufacturer,
visit
www.fueleconomy.gov/feg/tax_hybrid_new.shtml.
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