Hi Mari.
I hope this can be of help to you. Read on. vehicle purchased after Sept 30th the full credit does not apply. $3150 initially, went down to $1575
The amount of the tax credit depends on how many hybrids a manufacturer has sold ( Wholesaled ) to its dealers and Rental Car company within a certain period. - Toyota and Lexus are considered one manufacturer.
The full tax credit will be available for the purchases completed through the calendar quarter following the quarter in which the manufacturer reaches its cumulative sales
( Wholesales ) of 60.000 hybrid units.
The tax credit is then reduced by 50 % for the next 6 months
another 50% reduction then and then phased-out completely. Toyota is required to include sales ( Wholesale ) of all Toyota and lexus hybrids on or after January 1st 2006 towardsa single 60.000 units threshhold.
Toyota/Lexus hybrid sales from January 1-March 31st, 2006 totals 42.175
Toyota/Lexus forecast to reach 60.000 cumulative hybrids sales during the 2nd Quarter 2006. Credits will therefore be reduced by one-half beginning with vehicle put in service by consumers after September 30, 2006.
This is how Toyota puts it and sent to their dealers.
2005 Toyota Prius $3150
2006 Toyota Prius $3150
2006 Toyota Highlander 4WD Hybrid $2600
2006 Toyota Highlander 2WD Hybrid $2600
2006 Lexus RX400h 2WD $2200
2006 Lexus RX400h 4WD $2200
Starting in 2006, this tax credit replaces the tax deduction of $2,000 which was previously allowed for taxpayers who purchased a new hybrid vehicle before December 31, 2005 for the clean-burning fuel deduction. The tax credit requires a different certification. Many currently available hybrid vehicles may qualify for this new tax credit.
Consumers seeking the credit may want to buy early since the full credit is only available for a limited time. Taxpayers may claim the full amount of the allowable credit up to the end of the first calendar quarter after the quarter in which the manufacturer records its sale of the 60,000th vehicle. For the second and third calendar quarters after the quarter in which the 60,000th vehicle is sold, taxpayers may claim 50 percent of the credit. For the fourth and fifth calendar quarters, taxpayers may claim 25 percent of the credit. No credit is allowed after the fifth quarter.
The below is an excerpt from the Dept of Energy website at
http://www.doe.gov/taxbreaks.htm :
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Automobile Tax Credits
Individuals and businesses who buy or lease a new hybrid gas-electric car or truck are eligible for, and can receive, an income tax credit of $250-$3,400 ? depending on the fuel economy and the weight of the vehicle. Hybrid vehicles that use less gasoline than the average vehicle of similar weight and that meet an emissions standard qualify for the credit. “Lean-burn” diesel vehicles could also qualify, but currently available diesel vehicles do not meet the emissions standard. There is a similar credit for alternative-fuel vehicles and for fuel-cell vehicles.
If individuals and businesses buy more than one vehicle, they are eligible to receive a tax credit for each. If a tax-exempt organization buys such a vehicle, the retailer is also eligible to receive another credit. Companies that buy heavy-duty hybrid trucks are also eligible for a larger tax credit. Currently, there is a $2,000 tax deduction for hybrid vehicles for the remainder of 2005.
This tax credit is for vehicles “placed in service” beginning January 1, 2006, but because there is a waiting list for many hybrids, consumers can receive the tax credit if they arrange to purchase the vehicle this year as long as they do not take possession of the vehicle until January 1, 2006. This tax credit will be phased out for each manufacturer once that company has sold 60,000 eligible vehicles. At that point, the tax credit for each company’s vehicles will be gradually reduced over the course of another year.
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Federal only, and only through the end of the quarter in which the
60,000th
car is sold for each manufacturer. Some states also offer a credit,
but that is at the whim of each state legislature.
Actually through the end of the quarter after the quarter in which the
60,000th car is sold.
* Beginning January 1, 2006 and up through the quarter that the
automaker sells 60,000 hybrid vehicles, 100% of the credit is allowed.
* 100% of the hybrid car tax credit continues for the next
consecutive quarter.
* The next two quarters after that, the tax credit is reduced to
50% of the original hybrid car tax credit.
* Then, for the next two quarters after that, the tax credit is
reduced to 25% of the original hybrid car tax credit.
* Finally, the hybrid car tax credit for that automakers’ hybrids
drops to zero.
