Civic GX Federal Tax Credit -- Original Buyer Only?

[UtahScott]

As I read and re-read IRS form 8910, it appears that the only way to get the federal tax credit (up to $4,000 depending on your tax situation), is if you are the ORIGINAL purchaser of the vehicle from a Honda dealer. So, as I read form 8910, if you buy the vehicle on the resale/used market, you would not qualify for the tax credit because you are not the original owner of the car, even if no one has previously claimed the federal tax credit for that vehicle?

Realizing we're not tax experts, can anyone please advise me if I am reading or understanding the IRS rule correctly? It makes it sound that only the original purchaser of a new Civic GX can claim the tax credit.

Thanks, if advance, for your thoughts and comments!

[Eric Rosenberg]

Re: Civic GX Federal Tax Credit -- Original Buyer Only?

That is correct, it's up to $4000 to the original buyer.

Sorry,



Eric

[John Mitton]

Re: Civic GX Federal Tax Credit -- Original Buyer Only?

The credit is with "the first person to place the vehicle in service"

http://www.irs.gov/pub/irs-drop/n-06-54.pdf

Sellers can take the credit if the buyer is tax-exempt (municipality, religious organization, etc.).

[CNG4RD]

Re: Civic GX Federal Tax Credit -- Original Buyer Only?

Does anyone have any accounting expertise in explaining the statement 'place in service' and in particular how it might impact a regular non-business filer?

I understand how a business might buy a vehicle at the end of the year but no put it in 'service' or start using it for the business until the following year. In this case, the business would take the tax credit in the following year, the year they placed it in service.

My question is how might this apply to a regular household. Is it possible as a non-business filer to tell the IRS the same basic thing, I bought the vehicle at the end of 2008 but I didn't place it in service until 2009?

How do you prove such a thing? Is there a paper trail event that is the benchmark for placing something in service?

Thanks

[Larryect]

Re: Civic GX Federal Tax Credit -- Original Buyer Only?

Not an expert - only guessing. But, my guess would be it depends on registration. When it was registered, the assumption would be, it was put in-service. Otherwise, why would it be registered?......

[CNG4RD]

Re: Civic GX Federal Tax Credit -- Original Buyer Only?

Well it actually didn't matter for me as it turns out. As I read this form you subtract your AMT (alternative minimum tax) from the credit for the Civic which is $4000. So if you have an AMT of anything above zero you offset the credit equal to that amount. So an AMT >= 4000 and your credit it ZERO.

Who has an AMT of less than 4000? If your single you can't make more than 50,199, or you get zero
If you are married filing jointly you can't make more than $73,949, or you get zero

So DO NOT Expect anything at all if you make more than those to numbers, it just won't happen.

BTW, I was completely mislead when I bought my Civic, shame on me for not digging in and finding the form on-line, but shame on Brown Honda in SLC for blowing off my questions about the credit and flat out deceiving me. Maybe they have changed their practices as this was 18 months ago, but man it pissed me off.

Sorry Brown sales guy. Saying things like most everyone qualifies. Its a graded reduction. blah blah.

The offset isn't a gradual, it is instantaneous around a silly arbitrary cutoff based completely on your income. And he knew my income when I bought the car! He knew I wouldn't qualify for the credit. Total BS.

Buyer beware.

[John Mitton]

Re: Civic GX Federal Tax Credit -- Original Buyer Only?

Ah, but the AMT problem has been fixed with American Recovery and Reinvestment Act!!
Go back and re-file, you have money coming to you!!

Congress removed the issue we used to have with alt fuel vehicle tax credits (Form 8910) not being able to offset AMT (alternative minimum tax) liabilities.

The IRS page is here with PDF attached:

http://www.irs.gov/newsroom/article/0,,id=206875,00.html

CNGchat discussion thread is here:

http://cngchat.com/forum/showthread.php?6494-Trouble-with-Fed-Tax-credit