The Federal government will give purchasers of a new, qualifying hybrid vehicle a tax credit if the vehicle was purchased or placed in service on or after January 1, 2006. A tax credit is subtracted directly from the total amount of federal tax owed, thus directly reducing or eliminating the tax you must pay.

Note that if you lease a vehicle, the leasing company gets the credit. The tax credit only applies to purchasers of qualifying vehicles.

To find out which vehicles qualify and the tax credit associated with them, go to the IRS website article “Hybrid Cars and Alternative Motor Vehicles”.

It’s a way to reduce your use of fossil fuels, save the environment and get a break from Uncle Sam all in one.