U.S. Details Tax Breaks For Hybrid CarsU.S. Details Tax Breaks For Hybrid Cars

SAN JOSE, Calif. — Treasury Secretary John Snow on Friday (Jan. 13) announced the issuance of guidance regarding the tax credits for hybrid vehicles.

The credit, which was enacted by the Energy Policy Act of 2005, may be as much as $3,400 for those who purchase the most fuel-efficient vehicles.

The Energy Policy Act also provides tax credits for motor vehicles that are not covered by the guidance. The other vehicles eligible for credits are fuel cell vehicles, alternative fuel vehicles, and hybrid heavy trucks. The IRS will issue guidance providing certification procedures for these vehicles in the near future.

Hybrid vehicles have drive trains powered by both an internal combustion engine and a rechargeable battery. Many currently available hybrid vehicles will qualify for the tax credit. The guidance also provides a similar certification process for advanced lean burn technology vehicles.

"I'm pleased to announce the issuance of IRS guidance for the hybrid vehicle tax credit because the development and use of hybrid vehicles is a key step toward reducing gasoline consumption, emissions of air pollutants and greenhouse gas emissions,” Snow said in a statement. “I commend the manufacturers who are making these energy-efficient and environment-friendly vehicles and hope that the President's energy bill proves to be an important step in their rising prominence on American roads.”