2011 Hybrid Tax Credit

[Grey]

My buddy tells me that the order bank for the 2011 Fusion's (including Hybrids) opens up March 22, 2010. The current $850 Hybrid tax credit does not expire until 3/31/2010.

 

It would seem to me that you could "purchase/order" your 2011 Fusion Hybrid prior to 3/31/2010 and qualify for the $850 tax credit.

 

I wonder if Ford will notify dealers of this very small window of opportunity. If they set the same procedures in place that they had for the 2010's, you would want to obtain a copy of the dated purchase order for your tax records (to show you purchased before 3/31.)

 

It may take until August to get one, (they don't start building the 2011's until July) but the $850 is better than nothing. Sometime in June they would begin scheduling the first runs and possibly need to do the verification process before scheduling your unit, like last year (it ain't an order with Ford until it's verified!)

[Rob]

I wonder if Ford will notify dealers of this very small window of opportunity. If they set the same procedures in place that they had for the 2010's, you would want to obtain a copy of the dated purchase order for your tax records (to show you purchased before 3/31.)

 

It may take until August to get one, (they don't start building the 2011's until July) but the $850 is better than nothing. Sometime in June they would begin scheduling the first runs and possibly need to do the verification process before scheduling your unit, like last year (it ain't an order with Ford until it's verified!)

 

I don't believe it matters when the vehicle was purchased but rather when the vehicle was placed into service (when he takes delivery).

 

Rob

[wwoody723]

I don't believe it matters when the vehicle was purchased but rather when the vehicle was placed into service (when he takes delivery).

 

Rob

 

I see another debate on tax law coming.

[Rob]

I see another debate on tax law coming.

 

LOL, you may be right.

[Grey]

The % of the allowable tax credit is based on when the vehicle is purchased, or in this case ordered (purchase committment). The in-service date required on the 8910 form dictates the calendar year for which the tax credit may be claimed. If you order before 3/31 and take delivery anytime in 2010, you can claim the credit against your 2010 tax bill (that your file in 2011).

 

I just went through this with my 2010 Fusion Hybrid in filing my 2009 raxes. While the 8910 form is confusing, TurboTax does ask for both dates - purchase date (purchase committment) and in-service date, and figures the credit correctly.

 

Unfortunately for many Hybrid buyers, a lot of tax accountants and even IRS agents won't intrepret the form and credit qualifications correctly, and an incorrect allowance will be claimed. You have to go back to the 2007 instructions for the tax credit form and see the example of a hybrid buyer that "purchases" in on year and places in service the next year. Here is a quote from the IRS instructions:

 

"For example, if consumer A purchases a Prius on Sept. 30, 2006, and takes possession in February 2007, consumer A can claim the full credit for 2007, the year in which the vehicle is placed in service. On the other hand, if consumer B purchases a Prius on Oct. 1, 2006, and takes possession of the vehicle in February 2007, Consumer B can claim 50% of the credit in 2007, the year in which the vehicle is placed in service."

 

Either of these examples are only possible if you intrepret ordering as the purchase committment.date to determine the % of the credit that may be claimed.

 

I wonder how many sales people missed sales because they didn't understand the difference between "Purchase" and placing in service dates. Even $850 is a big deal on a Hybrid.

[Rob]

"For example, if consumer A purchases a Prius on Sept. 30, 2006, and takes possession in February 2007, consumer A can claim the full credit for 2007, the year in which the vehicle is placed in service. On the other hand, if consumer B purchases a Prius on Oct. 1, 2006, and takes possession of the vehicle in February 2007, Consumer B can claim 50% of the credit in 2007, the year in which the vehicle is placed in service."

 

Thanks Grey.

 

Rob