|  Qualifying
alternative fuel vehicles (AFVs) purchased or placed into
service between January 1, 2005 and December 31, 2010 may
be eligible for a federal income tax credit of up to $4,000.
Vehicles placed into service before January 1, 2005 may be
eligible for a $2,000 clean-fuel
vehicle tax deduction.
|
To be eligible for this tax credit, the vehicle
must only be capable of operating on any of the following
alternative fuels:
- Compressed natural gas (CNG)
- Liquefied natural gas (LNG)
- Liquefied petroleum gas (LPG)
- Hydrogen
- Any liquid at least 85% methanol by volume
|
Additional vehicle requirements:
-
It's original use commences with the taxpayer.
-
It is acquired for use or lease by the taxpayer, and
not for resale. (The credit is only available to the original
purchaser of a new, qualifying vehicle. If a qualifying
vehicle is leased to a consumer, the leasing company may
claim the credit.)
-
It is used mostly in the United States.
IRS has yet to provide guidance on using credits to reduce alternative
minimum tax liability and rules relating to recapture of credit
(e.g., if the vehicle is re-sold). |
Fill out Form
8910, Alternative Motor Vehicle Credit.
For AFVs acquired for personal use, report the credit from
Form
8910 on the appropriate line of your Form
1040, U.S. Individual Income Tax Return. |
Some state and local governments also provide incentives
for AFVs. Check with your state or local government or view
the U.S. Department of Energy's list of State
& Federal Incentives & Laws.
AFVs are not eligibe for electric vehicle tax credits. |
