[Gene]

Just picked-up my 2002 income tax forms from the tax advisor. The new 2002 Prius I purchased in 2002 gave me a bottom line savings of $300-$400 on my Federal income taxes for 2002.

I'm not a fat cat in the high tax brackets - is this $300 - $400 amount consistent with what others have seen?

I don't do my own taxes so the Prius purchase did pay for my tax advisor this year. Too bad it is a one time deal.

 

[nymatrix581]

Yes. It is.

 

[Goodspeed]

You need to remember that it's a $2000 Tax "CREDIT"

That does not mean you get the full $2000.

I will only be getting about $150 next year for mine.

 

[Henry]

Actually it's an "Adjustment to Gross Income" that you enter on line 32 of form 1040, i.e., it reduces your gross by $2,000 before you figure in your deductions, personal exemptions, etc., on page two of form 1040.

 

[Gene]

Numbers check out for me.

The bottom line savings ($300-$400) is in line with what I was told prior to purchase. I was just checking online before I mail my return, see if some other (NEW) info might be out there.
Thanks for the replies.
Gene

 

[Pebble Beach]

Just to clarify, it is a tax deduction ($2,000 this year, $1,500 next year). The deduction reduces your adjusted gross income, which is used to determine your tax rate and taxes owed. A tax credit reduces your taxes owed on a dollar for dollar basis. Again its a deduction and not credit.

 

[Joel]

It's too bad they are reducing the tax credit yearly to phase this out. I sent an email to my state representative last night - requesting consideration for state incentives for hybrid owners - I wish we had HOV privileges or reduced toll and fuel taxes.

 

[Henry]

Eat your heart out. In Pennsylvania, the Commonwealth will return 20% (as in "twenty percent") of the purchase price of a new Prius under the Alternative Fuel Incentive Grant Program, cycle 11.

Not a bad deal from the Kingdom of Coal.

When I bought my '02 Silver, under AFIGP cycle 9 I "only" got back $1,500.

Should have waited---if I had only known. But meanwhile I've had 18 months of pure joy driving my Classic.

 

[Jerry P]

Hi. I'm brand new here....2004 Prius is being delivered within two weeks and I can't wait! Right now I drive a 2001 Echo and it has been the best car I ever owned, and I've had a lot in my 30+ years of driving. I am wondering about the PA state grant. Any other info? Any help would be appreciated.

 

[Henry]

Jerry,

Suggest that you immediately contact grant officer Karen Miller in Harrisburg at 717-772-3359; her e-mail is "[email protected]".

Reason I say "immediately" is that you have to apply for the grant before you take delivery of the car!

You're going to ask her about the Alternative Fuels Incentive Grant Program, cycle 11.

Good luck!

 

[Jerry P]

Thanks, Henry. I called this morning but could only leave a message so I also e-mailed Ms. Miller. I personally think the price on the 2004 Prius is very reasonable for all that we are getting - although a lot of conventional US cars are dirt cheap right now. Any help that is availble is alway a good thing to pursue. I'll let you know how I make out.

 

[alnvilma]

tax credit & deduction

Hey Jerry P & Prius fans,
I am selling my 2000 ECHO that gives me 41 mpg on the highway!
I too ordered a new 2004 Prius and had the dealer not sold 'mine' to someone else, I'd be enjoyoing it now! Supposedly, I'll see another in 2 weeks (ya sure).
Here in Oregon the tax credit is $1500, plus the Fed's $2000 deduction AND the Toyota manufacture's rebate of $500 for the loyalty in lieu of their dealer's screw up = a healthy discount on the depreciation
Wish I could gloat over taking delivery.

 

[Jerry P]

Heard back from Karen Miller with PA grant section and , as in most things involving state government, there is a catch. The program is only opened at 'selected' times of the year, in this case Feb. 2004 at the earliest, and awarding of the grants is not guaranteed to all that apply. You can not have taken delivery of the vehicle prior to applying for the grant. Since I expect my Prius within the next 2 weeks, I guess I'm out of this one, but someone getting one early next year might give it a shot. The grant would have been nice, but I still believe the Prius is a very good priced car for all that we get with it. Can't wait till it gets here!

 

[ZaMoose]

Also heard from PA DEP

And I, too, am disappointed. Like Jerry mentioned, next Feb. is the likeliest time for them to re-open the grant process and Karen mentioned that most grants would be between $400 and $700 (it's not 20%, apparently, like the DEP website claims).

*sigh*

If that had come through, I would have been all over an '04 Prius. Guess I'll have to sit back and wait and see.

 

[whatshisname]

I'm a little puzzled when some postings ask, "Did you get your tax deduction yet?" or "Did you get your tax credit yet?" Perhaps some questions deal with international codes and things are handled differently. I bought my Prius in 2002 and when I filed my tax return for 2002 in April 2003, I simply TOOK it. It is now seven months later and I haven't heard from our IRS so I guess it must have been granted. It wouldn't surprise me if other tax payers who are not entitled to the credit and took it anyway are getting away with it. I think our IRS sleeps a lot.

 

[Henry]

There was quite an informative thread going on this topic over at the Yahoo!toyota-prius site not long ago. I recommend checking the archives over there, and if you're not registered with the site it will be well worth your while to do so.

The gist of it was that the Prius definitely does not qualify for a tax credit (form 8834?), as the instructions clearly state that the Prius is NOT eligible for the credit (it's not a "qualified electric vehicle"). On the other hand, the Prius *does* qualify as a "Clean Fuel Vehicle Property" (see IRS publ. 535 for details), and the regs clearly permit an adjustment to income on form 1040; the amount of the adjustment will depend on what tax year you put the car in service.

Finally, there was general agreement on two things: the IRS was (is) very clear about the status of Prius, and your chances of winning an argument with them on this one are non-existent as well as very expensive when you lose. That's assuming that they *do* wake up.

 

[whatshisname]

Hi Henry. Thanks for your information. I found it very interesting. I drive among a group of four Prius owner neighbors here in California and each of them has been told by their respective tax preparers that we have the $2000 gross income adjustment coming. I said "them" instead of "us" because I don't require the services of a tax preparer. Those filing in 2004 and afterwards will receive diminishing adjustments. I think your mention of the two separate bulletins covering electic and hybrid vehicles adequately deal with the matter. When I mentioned that some vehicle owners are improperly claiming the adjustment I meant the owners of brands other than electrics or hybrids. Some television advertising claims "low emission" status for their vehicles which is not true. Only the electrics and the hybrids by Toyota and Honda truthfully claim they are "SULEVs" and the others are the ones who may have trouble when the IRS wakes up from its naps. :wink:

 

[Henry]

Hi, Bill:

Sorry, I think I misinterpreted your post. If you made the adjustment to gross income as per publ. 535 you should be A-OK! I hope so, because I did it also!

It's only those who claimed a tax *credit* for the Prius who may have a problem.

Henry

 

[Pebble Beach]

http://1010wins.com/topstories/winstops ... 50759.html

 

[Henry]

Previous posted link refers *only* to the NY state tax situation, not to the Federal "clean fuel" adjustment to income on Form 1040.