How much tax credit can I get for purchaseing the Toyta prius. I would like to know the proper forms that are needed to get a refund.

The terms are real important:<br><br>A) There is a clean air DEDUCTION that subtracts $2,000 off your income.<br><br>B) There is a $2,000 electric car CREDIT that subtracts off your bottom line. Some think the car qualifies for this. Most (I hope it is fair to say) do not.<br><br>C) Bush has proposed CREDIT for HEV vehicles. I don't know where it stands.

Just an FYI, if you live in the California central valley, Bakersfield to Stockton (I believe), the San Joaquin Air Pollution Control Board is offering on a first come, first served basis a $2,000 cash refund for the purchase of a clean air vehicle. There are some requirements you have to meet to get the refund, but in long haul for $2,000 it is worth it.

The folks at Toyota told me that the Deduction is valid but the credit is not. However, check on the tax law in your state as well. Here in Colorado I got a $3500+ tax credit. Quite a discount!

This is true (for Colorado) as I will get the same thing. However, I won't get $3500 in state taxes taken from my salary over the whole year :( Therefore, I won't get the full $3500 back, just what I've paid over the whole year :(<br><br>--Russ Carver<br><br>P.S. I don't have a small salary, but claim 2 federally (if that makes a diff for state).

Are you sure you won't get it all back? Since it is a credit I think you might. If not, maybe you can carry the rest of the credit over to next year?

No, you won't get all of it back. Here's how it works:<br><br>If you pay $4000 in tax that year and have a $3500 credit, then you get $3500 back. If you pay $3500, then you get it all back. If you pay less than $3500, then you still get all you paid in back, but not a cent more. Otherwise the IRS would be paying YOU money! And we all know that won't happen :) It's a credit, not a gift. That is the way all tax credits work.<br><br>--Russ

I live in Colorado and will be going through the tax stuff next Spring. Could you send me some details about what credits apply? $3500 is more than I was expecting.<br>Thanks<br>Steve<br>sthompson@...

The information you will need for the Colorado State tax credit is found in forms DR0166, DR0167 and DR0168 all of which can be found on the colorado state revenue web site (of which I unfortunately no longer have the URL).<br><br>The gist is this: if filing prior to tax year beginning July 1, 2006, you get 85% of the difference between the Prius and the same car with no hybridization. Since there is no non-hybrid Prius, they use the Corolla (LE model I <br>believe). This difference (last year) was $4200<br>and so 85% of that will be around $3650.<br><br>--Russ Carver

The sales person told me that the Colorado credit could be carried over to the next year if the total was not used. Any fellow Coloradoans know if this is true? Or just salescritter garbage.<br>Steve

Thanks Russ.<br>Steve

Steve,<br><br>I think that is just salescritter bull. Although I don't know 100% -- just 95%.<br><br>--Russ Carver