The Hybrid Car Tax Break

The hybrid car tax break is still a big incentive for buying one, despite their higher cost over regular gas engine cars.

There used to be a tax deduction, but that has been replaced by a tax credit, applying to hybrid cars bought or put in service after January 1, 2006. Once a motor company has sold 60,000 hybrid cars however, the tax credit is gradually phased out.

The Energy Policy Act of 2005 instituted this credit for vehicles which use a combination combustion engine and rechargeable battery.

This tax incentive is only available to those who are the original buyers of the hybrid car. The credit is deducted from total federal tax owed.

Click here to see what each tax credit for hybrid car models are.

(please note: this information is a helpful guide, but isn't meant to take the place of a tax professional)