Plug-in Hybrids Roll On, in Stimulus Package

Things changed a bit in conference

Summary of final conference bill version on Green Car Congress:

The conference agreement follows the Senate version with substantial modifications. Provisions include:

A maximum credit of $2,500 is available for electric drive low-speed vehicles, motorcycles and three-wheeled vehicles.

A 10% credit, up to a maximum of $4,000, for the cost of converting any motor vehicle into a qualified PHEV. Minimum capacity of a qualified battery is 4 kWh. Plug-in conversions made after 31 December 2011 are not eligible.

The conference agreement limits the maximum credit to $7,500 regardless of vehicle weight. The conference agreement also eliminates the credit for low-speed plug-in vehicles and for plug-in vehicles weighing 14,000 or more.

The conference agreement replaces the 250,000 total plug-in vehicle limitation with a 200,000 plug-in vehicle per manufacturer limitation.

Changes to the plug-in credit are effective for vehicles acquired after 31 Dec 2009.

and an even more detailed summary from RIA, a tax law publisher:

For tax years beginning after 2008, a taxpayer can claim a credit for new qualified plug-in electric drive motor vehicles purchased before 2015. Under pre-Recovery Act law, subject to a limit based on weight, the amount of the credit was the sum of: (1) $2,500; plus (2) $417 for each kilowatt hour of traction battery capacity in excess of 6 kilowatt hours. No vehicle could qualify as an new qualified plug-in electric drive motor vehicles unless it drew propulsion using a traction battery with at least four kilowatt hours of capacity, and no passenger vehicle or light truck with a GVWR of 8,500 pounds or less could qualify as an new qualified plug-in electric drive motor vehicles unless it satisfied certain Clean Air Act and California standards. The portion of the credit for such a vehicle that is attributable to property of a character subject to an allowance for depreciation (generally, property used in a trade or business or for the production of income) is treated as part of the general business credit; the non-depreciable property portion is treated as a personal credit.

Under pre-Recovery Act law, the credit amount couldn't exceed the limit based on gross vehicle weight rating (GVWR), as follows: $7,500 for no more than 10,000 pounds; $10,000 for more than 10,000 pounds but no more than 14,000 pounds; $12,500 for more than 14,000 pounds but no more than 26,000 pounds; and $15,000 for more than 26,000 pounds.

Under pre-Recovery Act law, the credit (as computed above) phased out beginning in the second calendar quarter following that in which a manufacturer sells its 250,000th plug-in electric drive motor vehicle for use in the U.S. (50% credit reduction in second and third quarter; 75% in fourth and fifth quarter; 0 credit allowed thereafter).

New law. For vehicles bought after the enactment date and before Jan. 1, 2012, the Recovery Act creates a new 10% nonrefundable personal credit for low-speed vehicles, motorcycles, and three-wheeled vehicles that would otherwise meet the criteria of a qualified plug-in electric drive motor vehicle but for the fact that they are low-speed vehicles or do not have at least four wheels. The maximum credit for these vehicles is $2,500. The portion of the credit for such a vehicle that is attributable to property of a character subject to an allowance for depreciation is treated as part of the general business credit. Basis reduction and other rules apply. (Code Sec. 30, as amended by Act Sec. 1142)

For vehicles bought after Dec. 31, 2009, the Recovery Act provides that the amount of the Code Sec. 30D new qualified plug-in electric drive motor vehicle credit is the sum of: (1) $2,500; plus (2) $417 for each kilowatt hour of traction battery capacity in excess of 5 kilowatt hours. The amount of the credit so computed is limited to $5,000.

RIA caution: An official "full summary" dated February 12 of the tax provisions in the Recovery Act indicates that the $2,500 base amount of the credit is increased if the qualified vehicle draws propulsion from a battery with at least 5 kilowatt hours of capacity by $417, plus another $417 for each kilowatt hour of battery capacity in excess of 5 kilowatt hours up to 16 kilowatt hours (which is a $7,504 maximum credit).

The Recovery Act also reduces the 250,000 vehicle limitation in the phaseout provision to 200,000. Thus, the credit phases out beginning in the second calendar quarter following that in which a manufacturer sells after 2009 its 200,000th plug-in electric drive motor vehicle for use in the U.S. (Code Sec. 30D, as amended by Act Sec.1141)

The definition of qualified plug-in electric drive motor vehicle is revised to exclude low-speed vehicles. (Code Sec. 30D(d))

 

I was mainly trying to point out the max credit stayed at $7,500. Also, the number of units from a given manufacturer dropped to 200,000. This really has nothing to do with hybrid cars, unless that hybrid is plug-in, which no major car co. is actually selling yet. However, there is a $4,000 credit for plug-in conversions (e.g., Hymotion on the Prius).

 

$4,000 for a PHEV conversion? Right . . . at a 10% credit, your conversion would have to cost $40,000.00 right?
such a deal That's your lovely congress, hard at work saving the environment. At least they didn't screw up the PV solar crediits

 

"Changes to the plug-in credit are effective for vehicles acquired after 31 Dec 2009."

So if I installed the HyMotion upgrade last year (2008), does that mean I get no tax credit? :Cry: