Will anyone who file will get tax credit after purchasing hybrid car?

Question

What I do to get the tax credit . Is it done with yearly W2 tax return?
How it works ?

Answer 1

If you purchased a new hybrid vehicle after Jan. 1, 2006, you should qualify for a US Federal income tax credit, thanks to the signing of the big Energy Tax Bill of 2005. (You may run into issues if the credit is more than your tax liability, or if you hit AMT.) Amount depends on the hybrid that you purchased new, and when you purchased it.

http://www.irs.gov/newsroom/article/0,,id=157557,00.html
http://www.irs.gov/newsroom/article/0,,id=157632,00.html

The IRS hasn't come up with the 2006 forms and publications yet, but the first link suggests that you'll have to fill out IRS Form 8910 "Alternative Motor Vehicle Credit" (and maybe Form 3800 "General Business Credit" if a Business), and then reporte on the appropriate line on your Form 1040 "Income Tax Return."

(BTW: IRS Form W2 is the "Wage and Tax Statement" that your employer sends to you at the end of the year to help you report your taxable earnings/wages/tips.)

It is a one-time credit taken in the year that you purchased your hybrid vehicle. I do not think that you can carry it over to following years if you do not use it all in one year.

(If you purchased your hybrid up through Dec. 31, 2005, then you would qualify for the US Federal Clean Fueled Vehicle Income tax deduciton, in the year that you purchased the vehicle.)

Some states (like CO, WV, and I think OR and KS) offer a state income tax credit for the purchase of a hybrid. Some others will do a deduction (or let you carry over a federal deduction). Others may offer reduced sales tax for a hybrid.
A place to start investigating for your state: http://autos.groups.yahoo.com/group/toyota-prius/links/Financial_000963256550/

Since you're asking on a Toyota list, here's some pretty graphs and information about the tax credit for Toyota's hybrids and the phaseout dates/amounts:
http://www.toyota.com/prius/tax.html
http://www.toyota.com/camry/tax.html
http://www.toyota.com/highlander/tax.html

Answer 2

I believe it is a state tax deduction, most certainly in California, but there may be other states that give them.

Answer 3

http://www.fueleconomy.gov/feg/tax_hybrid_new.shtml

Answer 4

if it is used for bussines onley.