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The Federal Government has encouraged the use of different transportation fuels by allowing tax credits on vehicle purchases. The purchase of a traditional (non-plug-in) hybrid vehicle was eligible for a tax credit of up to $3,400 from 2005 through 2010. Diesels, which are more efficient than gasoline vehicles, were eligible for a similar tax credit, as were alternative-fuel vehicles. All of those credits were discontinued at the end of calendar year 2010. Now, electric vehicles and plug-in hybrid-electric vehicles are the only ones for which a tax credit is available – up to $7,500. To find out more about these tax credits, go to the IRS website, or FuelEconomy.Gov.
|Vehicle Type||Calendar Year in which
the Vehicle was Purchased
|Maximum Credit Amount||Vehicles Currently Eligible for a Tax Credit|
|Plug-in Hybrid-Electric Vehicles||2010 - on*||$7,500||2011 Chevrolet Volt|
|Electric Vehicles||2009 - on*#||$7,500||2010 Coda Sedan|
|2011 Nissan Leaf|
|2011 Smart For Two|
|2008-2010 Tesla Roadster|
|2011 Wheego LiFe|
|Hybrids||2005 - 2010||$3,400||Purchases made after
December 31, 2010
are not eligible for the tax credit.
|Diesels||2005 - 2010||$3,400|
|Compressed Natural Gas||2005 - 2010||$3,400|
|Liquefied Natural Gas||2005 - 2010||$3,400|
|Liquefied Petroleum Gas||2005 - 2010||$3,400|
|Hydrogen||2005 - 2010||$3,400|
|M85 (85% Methanol)||2005 - 2010||$3,400|
Source: U.S. Department of Energy and U.S. Environmental Protection Agency, www.fueleconomy.gov website, June 2011.