Nissan Altima Hybrid Certified as Qualifying for Alternative Motor Vehicle Credit

The Internal Revenue Service (IRS) has certified the 2008 Nissan Altima Hybrid as a qualified motor vehicle for purposes of the Alternative Motor Vehicle Credit. This certification is valued at $2350 for original owners of the vehicle.

The credit is based on the number of hybrid vehicles sold up to 60,000 by a manufacturer.

The Alternative Motor Vehicle Credit was created in the Energy Policy Act of 2005 and it replaced the clean fuel deduction. A tax credit is directly subtracted from the total amount of tax owed, where a deduction reduces the amount of money on which a tax is based, but while it will reduce your income tax liability, it will not reduce it below zero.

To qualify a vehicle can operate only on alternative fuels or mixed fuels (a combination of alternative fuel and petroleum based fuel)

This tax credit is non-refundable, meaning that any excess in a person's maximum dollar limit in tax credits is forfeited. If an individual's income qualifies for the AMT, or alternative minimum tax, it will not reduce that liability.

This credit is in effect for cars purchased after January 1, 2006 and is only available to the original purchaser. The credit begins to phase out in the second calendar quarter after the calendar quarter in which at least 60,000 of the manufacturer's qualifying passenger automobiles and light trucks have been sold.

As of the quarter ending September 30, 2007, Nissan had sold 2627 of the 7849 qualifying vehicles sold.

So far, only the Toyota and Lexus brands have reached the thresholds to have the tax credit associated with buying the brand begun to be phased out. That phase out period began on Oct. 1, 2006. Honda is about to reach the 60,000 vehicle threshold after having sold 58,872 the quarter ending June 30, 2007.

With this announcement, the 2008 Model Year vehicles qualifying for the tax credit include the following with the corresponding credit amount:

Chevrolet Malibu hybrid - $1,300
Ford Escape 2WD Hybrid - $3,000
Ford Escape 4WD Hybrid - $2,200
Honda Civic Hybrid CVT - $2,100
Mazda Tribute 2WD Hybrid - $3,000
Mazda Tribute 4WD Hybrid - $2,200
Mercury Mariner 2WD Hybrid - $3,000
Mercury Mariner 4WD Hybrid - $2,200
Nissan Altima Hybrid - $2,350
Saturn Aura hybrid - $1,300

To qualify for the tax credit, there are several requirements to be met by the taxpayer/purchaser of the vehicle: The vehicle must be purchased in the five year period between December 31, 2005 and December 31, 2010; the credit may only be claimed by the original purchaser of the vehicle - used vehicles do not qualify for the credit; the vehicle must be used by the taxpayer claiming the credit; and it must be used predominantly in the United States. There are caveats with these requirements and this is not an exhaustive list.

SOURCES:

IRS, URL: http://www.irs.gov/newsroom/article/0,,id=175641,00.html

IRS. URL: http://www.irs.gov/newsroom/article/0,,id=157557,00.html

About.com, URL: http://taxes.about.com/od/deductionscredits/a/hybridtaxcredit.htm