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Tax Credit Phaseout Period

Discussion in 'Gen 2 Prius Main Forum' started by Kiloran, Nov 10, 2005.

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  1. Kiloran

    Kiloran New Member

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    You're very welcome.
    Check out the FAQ. I've been putting lots of stuff in it today.
    Toyota Prius FAQ B)
     
    #21 Kiloran, Nov 10, 2005
  2. tripp

    tripp Which it's a 'ybrid, ain't it?

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    Is it possible to carry an unused portion of TC over to the next year? Like you can with capitol loss?
     
    #22 tripp, Nov 11, 2005
  3. Kiloran

    Kiloran New Member

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    Sorry. :(
    I haven't read anything that would lead me to believe that you could carry over any portion of it.
     
    #23 Kiloran, Nov 11, 2005
  4. HeuristicsInc

    HeuristicsInc New Member

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    The AMT calculation involves this crazy-nice person worksheet with lots and lots of numbers and flowcharts and absolutely no explanation of what they mean. If you want to see something really confusing, grab your irs tax form instructions magazine from this years' taxes and take a look at the worksheet; it's right in the 1040 book. I have NO IDEA what makes one need to pay this tax. None. It's bizarre!
    -bill
     
    #24 HeuristicsInc, Nov 11, 2005
  5. Kiloran

    Kiloran New Member

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    #25 Kiloran, Nov 11, 2005
  6. prius2006rocks

    prius2006rocks New Member

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    So four quarters a year? And they expect the Toyota tax credit to phase out in what quarter?
     
    #26 prius2006rocks, Nov 11, 2005
  7. Kiloran

    Kiloran New Member

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    From the link I put in the FAQ:
    In short, the period for the full hybrid vehicle tax credit lasts until at least June 15, 2006.
    The date you take possession of the vehicle (not the order date) is the applicable date for purposes of the tax credit.
    The 60,000 hybrid vehicle threshhold includes all models the manufacture sells after December 31, 2005.

    http://en.wikibooks.org/wiki/Toyota_Prius_...brid_tax_credit

    Phase-out of the hybrid tax credit:
    Once a manufacturer has sold 60,000 hybrid and/or diesel vehicles that qualify for the tax credit, the credit amount for vehicles made by that company is phased out according to the following schedule:

    Calendar Quarter Percentage of Full Credit
    When sales reach 60,000 100 percent
    1st quarter after 100 percent
    2nd quarter 50 percent
    3rd quarter 50 percent
    4th quarter 25 percent
    5th quarter 25 percent
    6th quarter and beyond No credit

    Toyota, which currently sells the most hybrid automobiles, is likely to hit the 60,000 mark early in 2006. Some other car companies may take years to reach it. The hybrid and diesel tax credits expire for all cars and light trucks on December 31, 2010, whether or not the manufacturer has sold 60,000 vehicles or reached the end of the phase-out period.
     
    #27 Kiloran, Nov 11, 2005
  8. windstrings

    windstrings Certified Prius Breeder

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    Thats not the way I understood it.. looks like it doesn't phase out till 6 months

    Quote from: http://hybridcars.about.com/od/news/a/hybridtaxcredit.htm
    * Beginning January 1, 2006 and up through the quarter that the automaker sells 60,000 hybrid vehicles, 100% of the credit is allowed.
    * 100% of the hybrid car tax credit continues for the next consecutive quarter.
    * The next two quarters after that, the tax credit is reduced to 50% of the original hybrid car tax credit. (Now one year has passed)
    * Then, for the next two quarters after that, the tax credit is reduced to 25% of the original hybrid car tax credit.
    * Finally, the hybrid car tax credit for that automakers’ hybrids drops to zero.

    So all in all... 1.5 years from the point the automaker sells 60000 rigs.

    The above post may have been saying the same thing.. but it gave me the impression it ended after march based on how I read it.
     
    #28 windstrings, Nov 11, 2005
  9. prius2006rocks

    prius2006rocks New Member

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    So what's your guess for when the 100% tax credit would be reduced? What month?
     
    #29 prius2006rocks, Nov 11, 2005
  10. Kiloran

    Kiloran New Member

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    If 60k cars are sold by sometime in the first quarter of 2006, the tax credit will follow the following schedule:

    (2006Q1) - 100%
    (2006Q2) - 100%
    (2006Q3) - 50%
    (2006Q4) - 50%
    (2007Q1) - 25%
    (2007Q2) - 25%

    If the 60k threshhold is reached sometime in the second quarter of 2006, the tax credit will follow the following schedule:
    (2006Q1) - 100%
    (2006Q2) - 100%
    (2006Q3) - 100%
    (2006Q4) - 50%
    (2007Q1) - 50%
    (2007Q2) - 25%
    (2007Q3) - 25%

    I believe the quarters start on January 01, April 01, July 01, and October 01.

    ==2006-Nov-12 Kiloran corrected September 01 with October 01.
     
    #30 Kiloran, Nov 12, 2005
  11. windstrings

    windstrings Certified Prius Breeder

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    Yea.. I think for all of us we should be ok.....
     
    #31 windstrings, Nov 12, 2005
  12. DaveinOlyWA

    DaveinOlyWA 3rd Time was Solariffic!!

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    Toyota is selling 10k per month now. that is expected to be near 15 k per month for 2006. (maybe as little as 13,500 but highly unlikely) throw in the other hybrids that should come close to 4-5 k per month
     
    #32 DaveinOlyWA, Nov 12, 2005
  13. HeuristicsInc

    HeuristicsInc New Member

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    aha, that's pretty good. i'll have to take another look at that worksheet & see if it makes more sense now. thanks!
    -bill
     
    #33 HeuristicsInc, Nov 14, 2005
  14. js972

    js972 New Member

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    I ordered my Prius in the end of October and expecting delivery somewhere in January/February 2006.
    How will I know if I am one of the 60000 to enjoy full tax credit?

    Thanks.
     
    #34 js972, Dec 7, 2005
  15. mdmikemd

    mdmikemd Member

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    You may be partially correct about the 150k. However, due to some archaic fomulae(sp?), how many deductions you take could be more important. Yahoo! in one of their quizzes on their business page, asked who would be more likely to pay the AMT. Examples of really wealthy people were given, but the correct answer was the guy who has 3 children that he claims as dependants.

    Anyhow, after spending a couple of days doing my taxes last year, turns out I had to pay the AMT. It made more sense for me to buy my Prius this year since I can claim the deduction, but can't take the credit next year.
     
    #35 mdmikemd, Dec 7, 2005
  16. Kiloran

    Kiloran New Member

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    There's good coverage of the government incentives and AMT in the Toyota_Prius_FAQ including a link to the H&R Block 2005 AMT Estimator. B)
     
    #36 Kiloran, Dec 7, 2005
  17. mdmikemd

    mdmikemd Member

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    Didn't work for me...well, I suspect I'll have the AMT again this year.
     
    #37 mdmikemd, Dec 8, 2005
  18. olends

    olends New Member

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    using the calc it looks like for 06 i will owe 4950 in taxes in 06. That results in an AMT of 0. It looks like i will get full use of the credit. Glad i'm Waiting
     
    #38 olends, Dec 8, 2005
  19. Kiloran

    Kiloran New Member

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    If you otherwise qualify for the full credit you only need to receive your car anytime before June 30, 2006.

    The credit is not for the first 60000 hybrid vehicles sold by a manufacturer.
    It is for all hybrid vehicles sold by a manufacturer up to the end of the quarter following the quarter in which the 60000 vehicle threshold is reached.
    The absolute earliest date for the tax credit phaseout to begin is July 01, 2006.
     
    #39 Kiloran, Dec 8, 2005
  20. js972

    js972 New Member

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    #40 js972, Dec 8, 2005
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