Tuesday, February 22, 2011

Where did my credit go?

Q.  I purchased a new Honda Insight last year and am hoping to take advantage of the Motor Vehicle Credit. What form do I need? LA, Kentucky

A.  The Qualified Alternative Fuel Motor Vehicle Credit under Code Section 30B in your case is taken on Form 8910. However, if you check out the US Department of Energy Federal Tax Credit for Hybrids, you will regrettably find that Honda Hybrids were phased out after December 31, 2008.

You may be eligible for the New Motor Vehicle Tax Deduction if you itemize your deductions on Schedule A, and you meet the Adjusted Gross Income limitations. The deductible taxes include state, local sales, and excise taxes on the purchase of a new vehicle with a purchase price up to $49,500.

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