Alternative Motor Vehicle Credit

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Purchasers of Ford Hybrids Still Qualify for Tax Credit

The Internal Revenue Service announced that purchasers of qualified Ford Motor Company vehicles may continue to claim the Alternative Motor Vehicle Credit. The announcement comes after the IRS concluded its quarterly review of the number of hybrid vehicles sold. Ford sold 6,272 qualifying vehicles to retail dealers during the quarter ending June 30, 2007. This brings the total number of Ford qualifying hybrids reported to date to 33,547.

The credit amount and make and model of the certified vehicles sold are:

  • Ford Escape 2WD Hybrid, Model Year 2008 — $3,000
  • Ford Escape 2WD, Model Years 2005, 2006 and 2007 — $2,600
  • Ford Escape 4WD Hybrid, Model Year 2008 — $2,200
  • Ford Escape 4WD, Model Years 2005, 2006 and 2007 — $1,950
  • Mercury Mariner 4WD Hybrid, Model year 2008 — $2,200
  • Mercury Mariner 4WD, Model Years 2006 and 2007 — $1,950
  • Mercury Mariner 2WD Hybrid, Model Year 2008 — $3,000

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.

IR-2007–140, Aug, 6 , 2007

Phase-Out Credit for Toyota and Lexus Hybrids Continues With Reporting of Second Quarter Sales

After reviewing the second quarter 2007 sales of Toyota Motor Sales USA Inc., the Internal Revenue Service announced that purchasers of qualifying Toyota and Lexus vehicles may continue to claim the Alternative Motor Vehicle Credit. Given the number of vehicles sold, the phase out period for Toyota vehicles began on Oct. 1, 2006.

Toyota sold 70,641 qualifying vehicles to retail dealers in the quarter ending June 30, 2007. This brings the cumulative sales of qualified Toyota hybrid vehicles sold from the period of Jan. 1, 2006, through June 30, 2007, to 344,083.

Taxpayers may claim the full amount of the credit up to the end of the first calendar quarter after the quarter in which the manufacturer records its sale of the 60,000th qualified vehicle. The sale of Toyota’s 60,000th qualified vehicle occurred in the quarter ending June 30, 2006. Therefore, for qualifying vehicles purchased between Oct. 1, 2006, and March 31, 2007, consumers may claim 50% of the credit amount. Consumers who purchase qualifying vehicles between April 1, 2007, and Sept. 30, 2007, may only claim 25% of the credit amount.

No credit is allowed after Sept. 30, 2007.

The applicable credit amounts are as follows:

  • Qualifying Vehicle
  • Full Credit When Purchased By 9/30/06
  • Reduced Credit When Purchased From 10/1/06 Through 3/31/07
  • Reduced Credit When Purchased From 4/1/07 Through 9/30/07
  • No Credit When Purchased After 9/30/07
  • 05, 06 and 07 Toyota Prius
  • $3,150
  • $1,575
  • $787.50
  • $0
  • 06 and 07 Toyota Highlander 2WD and 4WD
  • $2,600
  • $1,300
  • $650
  • $0
  • 07 Toyota Camry Hybrid
  • $2,600
  • $1,300
  • $650
  • $0
  • 06 and 07 Lexus RX 400h 2WD and 4WD
  • $2,200
  • $1,100
  • $550
  • $0
  • 07 Lexus GS450h
  • $1,550
  • $775
  • $387.50
  • $0

IR-2007-139, Aug. 6, 2007

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