1. Attachments are working again! Check out this thread for more details and to report any other bugs.

2006 tax credit & AMT

Discussion in 'Gen 2 Prius Main Forum' started by gjertsen, Jan 16, 2006.

  1. gjertsen

    gjertsen Junior Member

    Joined:
    Oct 20, 2005
    59
    1
    0
    I have heard conflicting things about the 2006 hybrid credit. I know the IRS hasn't published exact figures, but let's say for discussion I get a $3150 tax credit for the Prius I bought on 1/14/06.

    My question is about the alternative minimum tax (AMT). I know the credit can't possibly *decrease* AMT liability, but I hear conflicting things about whether it would possibly increase AMT liability.

    Does anyone believe that the credit would make me more likely to pay AMT? If so, could you explain that in a little further detail?

    As I understand it, the AMT calculation is done on form 6251, which does penalize you in a sense (make you more "AMT liable") for some tax shelters, such as property tax writeoffs and some other deductions. But unless the 2006 form 6251 (which isn't available, yet) adds back in the hybrid tax credit, it doesn't seem like the hybrid tax credit would affect AMT or vice versa at all. The credits are all totalled after the tax/AMT is calculated on form 1040 and deducted from the tax you owe.
     
    #1 gjertsen, Jan 16, 2006
  2. Kiloran

    Kiloran New Member

    Joined:
    Aug 31, 2005
    1,225
    3
    0
    I've been following the subject of the tax credit since July and read the applicable sections of the Energy Policy Act of 2005 and I have seen nothing that would lead me to believe the credit would increase your AMT calculation.
    My understanding is that the credit will be entered on the 1040, independent of the AMT calculation.

    All the best information and links I have encountered pertaining to the tax credit have been added to the Government_Incentives section of our FAQ.
     
    #2 Kiloran, Jan 16, 2006
(You must log in or sign up to post here.)