September 06, 2002
IRS Issues Additional Certifications of
Hybrid Vehicles for Clean Fuel Deduction
WASHINGTON - The Internal Revenue Service has certified two more hybrid gas-electric automobiles as being eligible for the clean-burning fuel deduction under a procedure for automobile manufacturers put in place in mid-May.
Purchasers of a new Honda Insight for model years 2000, 2001 and 2002 and purchasers of a Honda Civic Hybrid for model year 2003 will be able to claim a deduction of $2,000 for the year that the vehicle was first put into use.
Federal tax law allows individuals to claim a deduction for the incremental cost of buying a motor vehicle that is propelled by a clean-burning fuel. By combining an electric motor with a gasoline-powered engine, these hybrid vehicles obtain greater fuel efficiency and produce fewer emissions than similar vehicles powered solely by conventional gasoline-powered engines.
The amount of the deduction for the Honda was set after the manufacturer documented for the IRS the incremental cost related to the vehicle´s electric motor and related equipment. American Honda Motor Co., Inc. submitted the necessary information to the IRS under the process specified in Revenue Procedure 2002-42, which was issued in May.
Under the law, $2,000 is the maximum amount of the one-time deduction, which must be taken in the year the vehicle was first used.
Individuals take this benefit as an adjustment to income. They do not have to itemize deductions on their tax returns to claim it. Taxpayers may claim the deduction for a past year by filing an amended return.
[EDITORS: the original version of this release erroneously gave the model year 2003 for the Honda Insight and omitted 2000. The correct years are above.]
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