Had my taxes worked up yesterday and found hybrid deduction fairly simple to apply. There is a block on the federal return for the deduction which is $2,000 right off the top and reduces adjusted gross by two thousand. The dollar savings depending on your tax bracket. In my case I saved $280.00 on my Federal return. The State of Massachusetts allows the same deduction from the gross and the line on the return requests an explanation of the type and year of car model. I saved $106.00 on this one. I think Connecticut just might have the most liberal that I've heard about with the wavering of total sales tax. I could have saved over a thousand here. I brought in all the paperwork MRV suggested but none of it was necessary to be attached to return, however tax consultant used all the info in preparing return as it was the first their office had encountered. Big office, very few hybrids sold here. SUV's seem to work out a little better.