Alternative Fuel Tax Credit
America is in a gas crunch; supply is going down while the demand has increased. Gasoline prices rise, while the cash in our pocket withers away. But what can we do about it what is the Internal Revenue Service doing to make it more appealing for consumer to purchase alternative fuel vehicles?
While the technology is fairly new, not many people understand what they are and what the benefits of owning one is.
What is an alternative fuel vehicle?
An alternative fuel vehicle (AFV) is a vehicle that does not run on gasoline like traditional cars, but rather run solely on the following fuels:
- Liquefied Natural Gas (LNG)
- Hydrogen
- Compressed Natural Gas (CNG)
- Liquefied Petroleum Gas (LPG)
- Or any other liquid that is comprised of at least 85% methanol.
Electric, hybrid and diesel vehicles do not fall into this category, but rather have their own set of tax incentives.
What Vehicles Qualify?
Currently, the only vehicle on the list for the tax credit is the 2005-2008 Honda Civic GX. This vehicle runs on Compressed Natural Gas. If you have converted a vehicle it will not qualify, it must be a new vehicle.
Okay, so if I own one of these vehicles what tax credit would I expect to see?
If you happen to own one of these Civics, the IRS will give you a tax credit of up to $4,000.
What do I have to do to claim the credit?
It is as simple as filling out an additional form with you Federal Income Tax Return. Fill out Form 8910, Alternative Motor Vehicle Credit and attach it to your Form 1040.
What's the catch, are there any other requirements?
You must be the original owner or purchaser. The only person that can claim the credit is a consumer. However, if the vehicle is used by a leasing company, the leasing company may claim the credit. The vehicle must also be used primary in the United States.
Where do I get fuel for a vehicle like this?
Well, that is a very good question that depending on where you live, can't be answered. In some places the only business that will carry the fuel that you need is your local home heating company. You must search around of course, and find someone who is willing to get you fueled when you need it, not when it is convenient for them. Otherwise, what good is buying one and the tax credit if you can never drive it?
If you don't happen to own one of these vehicles, but do own a vehicle such as a hybrid, electric or diesel vehicle, you may qualify for a tax credit. The credit is different for each type of vehicle and only certain vehicles will apply. Please check out www.fueleconomy.gov for more information on these vehicles.
While the incentives might seem good and in the best interest of the gasoline dependent world, it may not be the best choice for you. When technology is still new and has not been widely used, there may be underlying issues that can't be seen at first. Always make an informed decision and never rush into anything.
