Hybrid Car Review

Its never too early to think about taxes, especially when you haven't filed for this year yet. Hybrid owners are realizing their tax deductions if they bought their cars last year, but consumers who buy a hybrid car this year may realize an even better deduction in the form of a hybrid car tax credit being estimated at up to $3400. The tax credit has not been outlined by the IRS as of yet, and the amount depends on the mileage of the hybrid car being purchased.

Ford has set up a hotline for buyers of Ford or Mercury Hybrids. They are promising to walk you through the federal tax breaks as well as the state tax breaks that may be available to buyers of hybrid cars.

* New hotline provides Ford and Mercury dealers a single source of information on federal, state, and local incentives available for Escape Hybrid and Mariner Hybrid owners
* Escape Hybrid and Mariner Hybrid qualify for a federal tax credit worth $1,950 to $2,600
* 35 states have proposed or approved state tax incentives for hybrid vehicles; 11 states have proposed or approved HOV lane access for hybrids

According to the dealer hotline statistics, the top places to own an Escape Hybrid or Mariner Hybrid currently are:

1. West Virginia, where the $1,950 – $2,600 federal tax credit and $3,750 West Virginia Alternative Fuel Motor Vehicles Tax Credit combine to total between $5,700 and $6,350 in tax relief.
2. Colorado, where the $1,950 – $2,600 federal tax credit is supplemented by the Colorado Alternative Fuel Vehicle tax credit, for a total of $4,806 to $5,358 in tax relief. In addition, the city of Aspen offers a $100 license registration discount, and free municipal parking.
3. Oregon and Louisiana (tie), where the $1,950 – $2,600 federal tax credit is supplemented by $1500 in tax relief from either the Louisiana Alternative Fuel for Motor Vehicles tax credit or the Oregon Residential Tax Credit, for a total of $3,450 to $4,100 in government incentives.

In these states, tax incentives more than offset the higher MSRP (approximately $3,500) of an Escape Hybrid or Mariner Hybrid over its gasoline-powered counterpart.

The hotline will be continually updated with information sourced from both government and government-support agencies. Consumers looking for more information on incentives in their area are encouraged to contact their local Ford or Mercury dealers. In addition, consumers are advised to confirm processes and eligible redemption amounts with a tax advisor, or the IRS.

In a side note on taxes, consumers who purchase hybrid cars may also be interested in upgrading their heating or other appliances in order to receive a 'green' tax break. Take a look at the article from Bloomberg discussing the possibilities, for example, of installing solar panels and getting a tax break next year.