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New Diesel-Fueled Car Credit

In response to high gas prices and a renewed interest in environmental causes by the American public, Congress has added many provisions to the tax code to encourage taxpayers to conserve. The Energy Policy Act of 2005 introduced an alternative motor vehicle credit (IRC Section 30B) for purchasers of new, hybrid autos.

Similarly, the IRS recently certified certain diesel-fueled vehicles for the alternative motor vehicle credit. This credit is a nonrefundable offset to your regular tax liability and is taken on Form 8910. In order to qualify, the vehicle must be purchased new (leased vehicles and previously owned vehicles do not qualify), and be certified by the IRS. The diesel-fueled vehicles that qualify for the credit include the following:

• 2009 Volkswagen Jetta 2.0L TDI Sedan manual or automatic – $1,300 credit
• 2009 Volkswagen Jetta 2.0L TDI SportWagen manual or automatic – $1,300 credit
• Mercedes GL 320 Blue Tec – $1,800 credit
• Mercedes R 320 Blue Tec – $1,550 credit
• Mercedes ML 320 Blue Tec – $900 credit

Taxpayers looking to take advantage of the alternative motor vehicle credit should act fast. The full amount of the credit can only be taken through the first quarter following the sale of the 60,000th vehicle of each model. In the second and third quarter following the sale of the 60,000th vehicle of each model, taxpayers are eligible for 50% of the credit. In the fourth and fifth quarters following the sale of the 60,000th vehicle of each model, 25% of the credit may be taken.

Please see the following link for a complete listing of vehicle models eligible for the alternative motor vehicle credit: Click Here.

If you have further questions, please contact Cara Hoffman at  choffman@BlackmanKallick.com or 312-980-3274 or your Blackman Kallick representative.

This publication is part of Blackman Kallick’s marketing of professional services, and is not written tax advice directed at the specific facts and circumstances of any person and/or entity. Contents of this publication are of a general nature, and you should not act on this information without obtaining professional advice from your business advisor that is appropriately tailored to your individual needs and circumstances. This written advice is not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.