[drbenson]

:?: :?: I was under the impression from reading the forums that the Prius was eligible for a federal tax credit- $1k this year, as I recalled. Now that I've purchased two, I contacted my accountant about the credits.

She says the Prius is NOT eligible for a tax credit, but IS eligible for a "clean fuel vehicle deduction" which reduces adjusted gross income.

Is there an accountant or tax person out there who can clarify the situation, preferably with references I can point my accountant toward? Thanks.

 

[JRjr]

A quick web search for ["clean fuel vehicle" tax deduction] (without the brackets) led immediatly to the following link:

http://www.irs.ustreas.gov/newsroom/art ... %2C00.html

Also, please note that the reduction in the deduction (typing that made me feel like Muhammad Ali :lol: ) may be leglislated away. See my earlier post for info: http://www.priusonline.com/viewtopic.php?t=2554.

 

[enoki]

Your accountant is correct. The Federal amount is a deduction from adjusted gross income. It is NOT a credit, which reduces your tax dollar for dollar. As a result, the $1,500 deduction will reduce your taxes by about $400, depending on your tax bracket. If it goes back up to $2,000, your Federal Income tax will be reduced by about $500, again depending on your tax bracket.

Information on the deduction is available on Toyota's web site and the IRS's web site.

Some states do allow a tax credit, which you claim on your state tax return, but not all states have this. Since I don't know what state you are in, I can't tell you whether your state has a credit or not. I know that Oregon and Conneticut do, but I am not sure which other states also have a tax credit.