Hybrid owners in the United States have been able to take a federal income tax credit the year in which they purchased their new hybrid. The tax credits phase out after 60,000 units of a model have been sold so those that purchase the ever-popular Toyota Prius are not eligible for this credit. Additionally, vehicles that run on alternative fuel or fuel cell technology have been eligible for this varying tax credit. Effective this year, vehicles that have qualifying advanced lean-burn technology can also qualify.

According to the IRS Press Release on the topic:

“…now certain advanced lean-burn technology vehicles, which generally run on diesel fuel have been certified. These vehicles are passenger cars or light trucks with an internal combustion engine designed to operate primarily using more air than is necessary for complete combustion of the fuel. The vehicles also must incorporate direct fuel injection technology and achieve at least 125 percent of the 2002 model year city fuel economy rating.

Available credit amounts may vary and include a base credit amount based on fuel economy compared to the 2002 model year city fuel economy rating and an additional amount based on the vehicle’s lifetime fuel savings. For a taxpayer to claim the credit, the original use of the vehicle must begin with the taxpayer and the vehicle must be acquired for use or lease by the taxpayer and not for resale.“

As of October 6, 2008, the following models are eligible:

2009 Volkswagen Jetta 2.0L TDI Sedan - $1,300
2009 Volkswagen Jetta 2.0L TDI SportWagen - $1,300
Mercedes-Benz GL 320 BlueTEC - $1,800
Mercedes-Benz R 320 BlueTEC - $1,550
Mercedes-Benz ML 320 BlueTEC - $900

For more information, please consult the IRS website or your accountant.

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