Clean Fuel Tax Deduction For
Hybrid Vehicles
“If you are the original (first) owner of a qualifying hybrid vehicle — one that combines an electric motor with a gasoline-powered engine — you may be eligible to claim a one-time tax deduction on your federal income tax return.
Under the Working Families Tax Relief Act of 2004, the
deduction amount is limited to $2,000 for cars first put into use in 2004 and 2005. The deduction will be limited to $500 for vehicles placed in service in 2006, and no deduction will be allowed after that year.”
IRS Tax Tip 2005-57, March 22, 2005