With gas prices hovering at $3.00 per gallon, drivers have already begun to migrate from gas guzzling SUVs to fuel efficient hybrids. As a sign of the times, GM recently announced that they plan to discontinue the namesake of the “Hummer deduction” in favor of the smaller Humvee.

“In addition to getting better gas mileage, purchasers of hybrids are also rewarded with a sizeable tax credit through 2010,” explains Andrew Schwartz, CPA, founder of CPANiche.com, a site where taxpayers can interact with CPAs who specialize in a variety of niches such as healthcare and real estate professionals.

“The new hybrid car tax credit replaces the $2,000 Clean Fuel deduction that was in place through the end of 2005. But you should be aware that this credit is only available in connection with the purchase of a new hybrid vehicle, so leasing one or buying a used hybrid vehicle won’t qualify.”

According to the information available on the IRS’ website, below are the vehicles currently eligible for this tax credit, along with the credit applicable to that model:

• Ford Escape Hybrid Front WD – 2006 $2,600
• Ford Escape Hybrid 4 WD – 2006 $1,950
• Honda Civic Hybrid CVT – 2006 $2,100
• Honda Civic Hybrid SUVEL – 2005 $1,700
• Honda Insight CVT – 2005 & 2006 $1,450
• Honda Accord Hybrid AT – 2006 $1,300 or $650
• Honda Accord Hybrid AT – 2005 $650
• Lexus GS 450h – 2007 $1,550
• Lexus RX400h 2WD or 4WD – 2006 $2,200
• Mercury Mariner Hybrid 4 WD – 2006 $1,950
• Toyota Camry Hybrid – 2007 $2,600
• Toyota Highlander Hybrid – 2006 $2,600
• Toyota Prius – 2005 & 2006 $3,150

Even though the hybrid car tax credit runs though 2010, the credit won’t be available for long on many popular models. To level the playing field for Ford and other newcomers into the hybrid market, the allowable tax credit starts to disappear for a manufacturer once they have sold 60,000 hybrid vehicles. [PRWEB]

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