Energy Credit for tax year 2006

[paultwentworth]

I put a deposit on a Prius, the end of 2005. I took delivery in January of 2006. Recently, I got a letter from Toyota asking if the information they had on my car was correct and in the letter they said that I recently purchased a Prius in 2005. SO I called my car dealship and they replied that even though it is registered in 2005, all the paperwork says I bought it in 2006, and that that is all the IRS needs to see to allow me to get the tax credit. I am still concerned. Does any know what the IRS needs to see for me to get the tax credit on my 2006 tax return and/or is there any information out there on this tax credit?

Thanks ...Paul

[Jim1eye]

<div class='quotetop'>QUOTE(paultwentworth @ May 31 2006, 11:05 AM) [snapback]263379[/snapback]</div>

I put a deposit on a Prius, the end of 2005. I took delivery in January of 2006. Recently, I got a letter from Toyota asking if the information they had on my car was correct and in the letter they said that I recently purchased a Prius in 2005. SO I called my car dealship and they replied that even though it is registered in 2005, all the paperwork says I bought it in 2006, and that that is all the IRS needs to see to allow me to get the tax credit. I am still concerned. Does any know what the IRS needs to see for me to get the tax credit on my 2006 tax return and/or is there any information out there on this tax credit?

Thanks ...Paul
[/b]

They asked you if the information they had is correct. WRITE them, and tell them "No, it is not. I bought the car in 2006, not 2005." Include a copy of your dated receipt.

Said receipt will be what you need for the tax credit, along with form 8834, which is available by clicking here.

[Djsight]

<div class='quotetop'>QUOTE(Jim1eye @ May 31 2006, 11:33 AM) [snapback]263395[/snapback]</div>

They asked you if the information they had is correct. WRITE them, and tell them "No, it is not. I bought the car in 2006, not 2005." Include a copy of your dated receipt.

Said receipt will be what you need for the tax credit, along with form 8834, which is available by clicking here.
[/b]

Thats why I pay for an accountant!!!

[sdsteve]

<div class='quotetop'>QUOTE(Jim1eye @ May 31 2006, 08:33 AM) [snapback]263395[/snapback]</div>

They asked you if the information they had is correct. WRITE them, and tell them "No, it is not. I bought the car in 2006, not 2005." Include a copy of your dated receipt.

Said receipt will be what you need for the tax credit, along with form 8834, which is available by clicking here.
[/b]

I'm not an accountant, but I don't think form 8834 is the correct form. it explicitly says that hybrids are not qualified electric vehicles. Looks like form 8910 will be the correct one:
http://www.irs.gov/pub/irs-pdf/f8910.pdf

More information on the credit is here:
http://www.irs.gov/newsroom/article/...157557,00.html

Even though a manufacturer has certified a vehicle, a taxpayer must meet the following requirements to qualify for the credit:

1. The vehicle must be placed in service after 12-31-05 and purchased on or before 12/31/10.
2. The original use of the vehicle must begin with the taxpayer claiming the credit.

a. The credit may only be claimed by the original owner of a new, qualifying, hybrid vehicle and does not apply to a used hybrid vehicle.

3. The vehicle must be acquired for use or lease by the taxpayer claiming the credit.

a. The credit is only available to the original purchaser of a qualifying hybrid vehicle. If a qualifying vehicle is leased to a consumer, the leasing company may claim the credit.

b. For qualifying vehicles used by a tax-exempt entity, the person who sold the qualifying vehicle to the person or entity using the vehicle is eligible to claim the credit, but only if the seller clearly discloses in a document to the tax-exempt entity the amount of credit.

4. The vehicle must be used predominantly within the United States.

The hybrid vehicle certifications recently acknowledged by the Service and their credit amounts are:

2005 Toyota Prius $3150
2006 Toyota Prius $3150
2006 Toyota Highlander 4WD Hybrid $2600
2006 Toyota Highlander 2WD Hybrid $2600
2006 Lexus RX400h 2WD $2200
2006 Lexus RX400h 4WD $2200


Assuming you've met all the rest of the conditions (sounds like you met condition 1), you can get the credit. You don't need to submit any papwerwork other than the form 8910. To be safe, make sure that the DMV records show the original service date in 2006, but that will only be required if you get audited.

[avipet]

Thanks for the info, but those links are for a 2005 year form. If I bought a 2006 in January 2006, don't I need the 2006 tax year form?

[sdsteve]

<div class='quotetop'>QUOTE(avipet @ May 31 2006, 06:55 PM) [snapback]263761[/snapback]</div>

Thanks for the info, but those links are for a 2005 year form. If I bought a 2006 in January 2006, don't I need the 2006 tax year form?
[/b]

From what I can see the form was printed in 2005 but is only applicable to 2006. The directions only talk about 2006, and 2006 is already filled in for the service date (line 2). So I believe that is the current/correct form, although it may get updated slightly for the 2006 tax season and the year updated.

Steve

[SSimon]

I'm looking at the verbiage for the Hybrid Vehicle Tax Credit and it states that the vehicle must be new, that the purchaser must take DELIVERY after January 1, 2006, that the hybrid tax credit amounts will begin to be reduced for deliveries later in 2006 and that the purchaser must retain appropriate documentation showing the purchase of the vehicle and the date of delivery. If, for some reason, you encounter difficulty getting the delivery date recognized and the only allow for a 2005 credit; you would still receive a credit, but only one of $2,000. This 2,000 would be recognized as a tax deduction, not a hybrid tax credit. I'm not sure what the ramifications of this difference is to the bottom line of your return.

[sdsteve]

DMV will have a record of the date the vehicle was purchased as well as registered. You should also have the paperwork copies as part of the pickup from the dealer. As long as they are dated after 1/1/2006, you should be fine. From what I've seen, this is on the honor system in as much as the dealer doesn't submit anything to the feds so it doesn't matter what they have, it only matters what you have in your paperwork from them IF you were to get audited.

BTW, the other issue is that you may be getting shorted on your warrantee period if they think you picked the car up earlier.

One more thing... check with carfax.com and see what they have in the datebase. May be worth paying for the service for the full report of the car if it shows after January. If IRS audits you on it, you have that as evidence as well (plus you have the references for original records for purchase/registration should you need to get more docs).

[Jim1eye]

<div class='quotetop'>QUOTE(San Diego Steve @ May 31 2006, 06:30 PM) [snapback]263654[/snapback]</div>

I'm not an accountant, but I don't think form 8834 is the correct form. it explicitly says that hybrids are not qualified electric vehicles. Looks like form 8910 will be the correct one:
[/b]

Oops, thanks for that catch Steve. It is the 8910, which should have a 2006 designation when the time comes.

[chinook-hybrid]

<div class='quotetop'>QUOTE(Jim1eye @ May 31 2006, 08:33 AM) [snapback]263395[/snapback]</div>

Said receipt will be what you need for the tax credit [/b]

I am with Jim. My wife and I picked up our 2006 on December 31, 2005 and I made sure all of our documentation reflected Jan. 1, 2006. The dealer said that it was not uncommon for tax purposes to do such a thing. All the documentation I have (bill of sale, registration, etc.) reflects Jan 1, 2006 as the day I took possession of the vehicle. I had planned to stay overnight to pick it up in the morning, however, this option allowed me not to.

I will be getting my credit (not deduction) in 2006. Anyone who is familiar with Tax Code knows there are multiple ways to interpret the verbiage. I mean, there are 18 different definitions of what a dependent is. Talk about crazy...