A question about the Toyota Prius?

Question

I heard that if you purchase a new Toyota Prius, there is a tax rebate of $3100. My question is...

What would 'disqualify' someone from receiving that great tax incentive?

...i really really want to receive that tax incentive when i buy my Prius in a couple of weeks, i am just paranoid that i will get screwed out of it come tax season. I have bad luck and think negative. I just don't want it to be like those false advertised 'mail in rebates' which I never get after buying electronics.

Answer 1

If you are purchasing the Prius new, as an individual (vs.
commercially), it is a very straight forward tax deduction.

There is a section of the tax return actually devoted to such
deductions.

Of course, that means you'll end up itemizing your deductions
on your tax return, which means no more 1040EZ for you, but
otherwise, its very painless.

I believe companies will also get the deduction, but as usual
with corporate tax returns - nothing is simple.

Answer 2

1. you have to purchase a 2005 or 2006 Prius. (I'm not sure if leases count.), after Jan. 1, 2006 for the tax credit. (prior to that date, it was a tax deduction.)
2. the vehicle has to be new, not used.
3. you have to have US federal taxable income
4. the tax credit cannot be rolled over to future years if you do not use it all in the year of your purchase
5. if you meet AMT, you may not get the tax credit

The amount of the hybrid vehicle tax credit in the US depends on a few things: the model of hybrid that you buy, and when you buy it (as the tax credits will start to phase out after a manufacturer sells a certain number of hybrids in a quarter).

For a 2005 or 2006 Toyota Prius, the full tax credit is $3150.

However, Toyota/Lexus/Scion has sold more than 60,000 hybrids since Jan. 1, 2006 (the magical number where the phaseout period begins). Since they hit the number in 2006Q2, and the full credit runs until the end of the quarter after the manufacturer hits the magic 60k number, the full credit extends to the end of 2006Q3 (or Sept. 30, 2006). If you want the full $3150 tax credit for a Prius, make sure that you take delivery/in-service date is no later than Sept. 30, 2006. Starting on Oct. 1, 2006 (the following 2 quarters) the tax credit is 50% of full. Then the next 2 quarters is 25% of full, then no more credit.

(See the toyota page below for a nice pretty chart explaining the tax credit amount and dates.)

As for how to file, the IRS hasn't come up with the 2006 tax forms yet. Based on one of their articles below, it looks like you will need Form 8910, and then if you are an individual purchaser you would report it on your Form 1040, but a business would report it on Form 3800.

You'll probably want to print out the relevant pages below and bring them to your tax preparer, in case they aren't familiar with the available tax credit.

Don't forget, some states will also offer some incentives (reduced sales tax, an income tax deduction or credit, a grant (if filed before purchase), etc.)
see: http://autos.groups.yahoo.com/group/toyota-prius/links/Financial_000963256550 for more info.

Answer 3

Its a credit noy a rebate. The dollar amount is 3150. It is taken like the child tax credit on your tax return

Answer 4

You might want to call Jackson and Hewit or H and R block and see what the rebate is I think thy changed it this year to only $1000 or $1500.

Answer 5

Since this is a government issued rebate they have to give you the money.

Answer 6

its probably only if its a flex fuel or hybred

Answer 7

read read read the fine print.