What is the tax credit for a Prius in the 2006 Energy Bill?

[andyz]

Now that the Bill has been passed and likely to be signed into law, what is the likely dollar amount of the tax credit for the Prius? Has Toyota, or anyone else for that matter, figured out the credit based on the crzy formula in the Bill?

Since I'm looking to buy a new Prius, I'm trying to decide whether to buy it in 2005 for the $2000 deduction or wait for 2006 and get the preferred credit.

[bookrats]

See [url=http://www.priuschat.com/forums/federal-transportation-act-and-tax-incentive-vt10707.html]this PriusChat thread for answers to this question.

[mikecski]

I'm considering buying a 2006 Prius which my dealer says will arrive this fall.
From what I've read doing that will mean I fall between the deductions credit for a 2005 of $2000 and the credit credit under the new energy bill ($1200 to $2700) essentially in a low position of a $500 tax deduction. This does not sound good. Is waiting 'til January the only solution?

[EricC]

My understanding is that if Toyota get the 06 certified for this tax year you can get the $2000 tax deduction for purchasing in 2005 but if you wait an extra month or so you will end up with something in the neighborhood of a $2500 tax credit. The deduction or credit is based on the year that you purchase the car in, not the model year of the car. I don't know how long it takes to get a car certified by the IRS but I would assume that Toyota would get it done ASAP for the 06.

[AnOldHouse]

[quote]See [url=http://www.priuschat.com/forums/federal-transportation-act-and-tax-incentive-vt10707.html]this PriusChat thread
Acutally, this thread answers the questions better as it is based on the the version of the bill that got passed in Congress: http://www.priuschat.com/forums/energy-bil...nference+report

[AnOldHouse]

I'm considering buying a 2006 Prius which my dealer says will arrive this fall.
From what I've read doing that will mean I fall between the deductions credit for a 2005 of $2000 and the credit credit under the new energy bill ($1200 to $2700) essentially in a low position of a $500 tax deduction. This does not sound good. Is waiting 'til January the only solution?

No. The $500 tax deduction that would have been for calendar year 2006 is being replaced by the new Energy Act with its tax credits for hybrids. The new tax credit in 2006 for a Prius will be $2,750 as long as model year 2006 achieves 60 city EPA.

Any purchase in the remainder of this calendar year will be eligible for the current $2,000 tax deduction, regardless of model year purchased.

My advice is, if you decide to buy, cut a deal with your dealer soon after the details of the 2006 model year are released on August 16, but stipulate in writing that you will not accept delivery before January 1, 2006.

[AnOldHouse]

I don't know how long it takes to get a car certified by the IRS but I would assume that Toyota would get it done ASAP for the 06.

Toyota will get the Prius certified right away of course as they'll certainly want to market the vehicle with such a significant tax incentive, but the tax credit can't be used until you file your personal taxes in early 2007.