Tax deduction on hybrid cars for 2005 ~ Hybrid Car Review
Hybrid Car Review: Tax deduction on hybrid cars for 2005

Thursday, April 13, 2006

Tax deduction on hybrid cars for 2005

Did you buy a hybrid in 2005? You are eligible for a tax deduction of up to $2000 on your taxes.

If you are the original owner of a qualifying hybrid vehicle that was put into use in 2005, you are elegible to claim a one-time tax dedution on your federal income tax return.

Qualifying hybrid vehicles include:

  • 2005-2006 Ford Escape Hybrid

  • 2006 Mercury Mariner Hybrid

  • 2006 Lexus RX 400h

  • 2001-2006 Toyota Prius

  • 2006 Toyota Highlander Hybrid

  • 2000-2005 Honda Insight

  • 2003-2005 Honda Civic Hybrid

  • 2005 Honda Accord Hybrid

  • This deduction is taken as an adjustment to income. You do need to use Form 10400, but you don't have to itemize deductions to claim it. Include your deduction on the dotted line to the left of line 36 and identify it as "Clean-Fuel."

    For more information, see IRS Publication 535, Business Expenses. Note that despite the name, individual owners are eligible for the deduction.

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