question.jpgIn Federal Income Tax

What is the alternative motor vehicle credit?

If you purchased a new hybrid vehicle in 2006, you are entitled to take a credit for that purchase. The vehicle must be new (not used), and you must have purchased it (as opposed to taking a lease). The amount of this credit for the 2006 tax year will be an amount between $400 and $3,400, depending on what specific model you purchased – you can review Form 8910 to calculate the exact amount of the credit for your particular situation.

This same credit also applies to other alternative fuel vehicles and vehicles using fuel cells, and you can again look to Form 8910 for help in figuring out the amount of your credit.