If you bought an older Ford hybrid this year, you might be able to take tax advantage of the purchase on your 2006 tax return.
The IRS announced Friday that it has certified that two of Ford’s 2005 hybrids meet the new alternative fuel tax credit. The latest blue oval additions are:
- 2005 Escape two-wheel-drive, eligible for a $2,600 credit, and
- 2005 Escape four-wheel-drive, eligible for a $1,950 credit.
Earlier this year, Ford’s 2006 Escape hybrids, both two- and four-WD models, were certified at the same credit levels as the just-added 2005 versions. You can find a full list of credit-qualifying Ford vehicles in this earlier post.
As with all eligible vehicles, the Fords must be purchased on or after this Jan. 1. And each manufacturer’s credits will start phasing out once it sells 60,000 hybrids.
Ford fans don’t have to worry about that right now. It’s likely to be well into 2007 before the beleaguered automaker hits that sales mark. As of June 30, Ford had sold just 11,885 of the fuel-efficient vehicles.
For more information on the hybrid credit, check out all of Don’t Mess With Taxes‘ posts (this one will show up first; scroll down for older entries), this Bankrate.com story or the IRS’ special Web page on the credit.
Closer to home: You also might want to follow the adage, "Think globally, act locally."
Some state and local governments provide additional incentives for hybrids and other fuel-saving autos. Check with your state or local government or try out the U.S. Department of Energy’s clickable map for more on fuel- and vehicle-related laws and tax breaks in your state.
