The IRS Alternative Motor Vehicle Tax Credit will be expanded in 2009. A new federal tax credit will be put in place that covers plug-in hybrid electric cars and trucks. Hybrid gasoline-electric, diesel, battery-electric, alternative fuel, and fuel cell vehicles tax credits are all available as well. The tax credits will be phased out after a certain date or after a certain number of vehicles is sold. The details of how the tax credit will be phased out depends on the type of vehicle.
Buy a plug-in hybrid electric car or truck. A new federal tax credit will be put in place in 2009 that covers plug-in hybrid electric cars and trucks. The tax credit amounts range from $2500 - $7500. The first 250,000 plug-in hybrid vehicles sold will get the full tax credit, and then it will be phased out like earlier tax credits.
Claim a credit on most other fuel efficient vehicles bought in the past few years. Tax credits are still available for hybrid gasoline-electric, diesel, battery-electric, alternative fuel, and fuel cell vehicles. These credits cover cars from 2006 onward.
Buy before the manufacturers reach their quotas. Tax credits for hybrid and diesel vehicles will end in 2010, but will be phased out early for each manufacturer that sells 60,000 eligible vehicles.
For details on applying for these credits, see the Resources section below for links to the IRS website and the Energy Star website.
