Tax Credit Saves You Money on a Green Vehicle

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You probably already know by now that you can receive a tax credit on energy-efficient appliances through the U.S. government-backed ENERGY STAR program (check out several of these appliances in U.S. Green Technology’s “Tech & Gadgets” section). However, if you are thinking about buying a new vehicle this year, you should look a bit more closely at that alluring 2013 Honda Accord plug-in hybrid or a similar vehicle type. You could end up saving money in tax benefits.

Any plug-in hybrid-electric vehicle, also known as a PHEV, or other electric vehicle (EV) that is purchased in or after 2010 could be eligible for a federal income tax credit of up to $7,500. This amount is dependent on the capacity of the vehicle’s battery. The offer is available if you have purchased a car such as the 2011 Chevrolet Volt or the 2010 CODA Sedan. The electric vehicle credit actually replaces an earlier credit for these types of cars purchased in 2009.

Some vehicles actually combine hybrid-electric and flex fuel technologies, which can alternate between two or more power sources such as ethanol and gas and thus use less gasoline. No specific tax credits appear to exist for straight flex fuel automobiles, however.

If you have purchased a green vehicle in the past few years, you also are in luck for a flex fuel credit. For example, qualifying alternative fuel vehicles, also known as AFVs, could be eligible for a federal income tax credit of up to $4,000 if they were purchased or placed into service between Jan. 1, 2005, and Dec. 31, 2010. This includes vehicles such as the 2005-11 Honda Civic GX and solar cars.

In addition, hybrids purchased or placed into service between Dec. 31, 2005, and Dec. 31, 2010, might be eligible for a federal income tax credit of up to $3,400. An example is the 2009 Chrysler Aspen Hybrid or the 2009 Dodge Durango Hybrid.

Green technology vehicles not only help to save the environment but also help to save your wallet by allowing you to avoid the pain at the pump as gas prices continue to rise. The U.S. government’s goal is to replace 20 percent of America’s gasoline consumption by 2017, and offering incentives for the purchase of environmentally friendly vehicles helps to achieve this.

By YaShekia King

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