Tax credit for buying a smart

[Songman]

Ok who is correct. My brother says I get a tax credit up to $4500.00 for buying a smart car. I say no....only hybrids or some electric assist or bio car buyers get that credit not 100% fossil fuel cars. Anyone know the answer?

Songman

[John_H]

A $4500 tax credit applied during the cash-for-clunkers program.

There is a federal tax credit for hybrids but nowhere near $4500.

[rfernatt]

I don't believe straight gasoline powered vehicles ever qualified for the original tax credit which is no longer available on cars like the Prius, etc. since they've reached the cap. Cash for Clunkers was $4,500, but this credit topped out at $3,400 I think depending on various factors. Some states may offer a credit that is separate from the federal credit, but that depends on the state. See the following article for a little more info:

No tax credit for Prius, but other hybrids eligible

As you would suspect, Toyota sells the most hybrids, so that company was the first to end tax credits. If you bought a Toyota Prius before Jan. 1, 2006, the tax credit was $3,150. But later that year, Toyota had sold 60,000 hybrids, so the Prius credit dropped to $1,575, then $787.50, then -- after Sept. 30, 2007 -- nothing.

If all these incentives don't sound particularly fair, well, they aren't. The Smart ForTwo, for instance, is rated at 36 miles per gallon overall, but since it is powered by a regular gas engine, there are no incentives offered for it. But those Chevrolet Tahoe and GMC Yukon hybrids, rated at 21 mpg overall, have that $2,200 tax credit.

[Benjamin]

I believe that we get sales tax credit if car was purchased in 2009 (applicable to any new vehicle up to $49,999 including motorcycles and motorhomes purchased in 2009). However, the way it works is that you will have to subtract this $ as a deduction. I'm not a Tax wiz, but money saved will be definitely less than paid out in taxes at the time of purchase. Probably several 100's back is still better than nothing.

[jwight]

One state (CT?) was offering a credit for high mpg cars - I think the smart qualified.

[Songman]

thanks Everyone!