You may be able to get a tax credit for your fuel-efficient vehicle if it is a qualified hybrid, diesel-fueled, or alternative-fueled vehicle. The availability of federal income tax credits depends on the make of your vehicle.

Hybrid vehicles and some diesel-fueled vehicles purchased or placed into service after December 31, 2005 may be eligible for a tax credit of up to $3,400. Qualifying alternative-fuel vehicles (AFVs) that were purchased or placed into service between January 1, 2005, and December 31, 2010, may be eligible for a tax credit of up to $4,000.

For a given vehicle manufacturer, the tax credit amounts begin to phase out once the manufacturer has sold more than 60,000 eligible hybrid and lean-burn vehicles since December 31, 2005.

In order to claim the tax credit, you must meet the following conditions:

• You must be the original purchaser of a new, qualifying vehicle.
• The vehicle must be used primarily in the United States.
• You must have started using the vehicle after December 31, 2005, and have purchased it on or before December 31, 2010.

Hybrid vehicles purchased before 2006 are not eligible for a tax credit, but may be eligible for a tax deduction. Hybrids are not eligible for electric vehicle tax credits.

The tax credit for hybrid and diesel-fueled vehicles cannot be used to offset the alternative minimum tax (AMT). You can only claim the tax credit if your regular tax liability exceeds your AMT liability.

You can claim the tax credit using Motor Vehicle Credit Form 8910. The credit is reported on the appropriate line of Form 1040 Individual Income Tax Return. To learn more about tax credits for fuel-efficient vehicles, refer to the U.S. Department of Energy’s Fuel Economy Web Page.