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Ford Escape and Mercury Mariner Hybrids Certified for the Clean-Fuel Deduction

The Internal Revenue Service has certified the model year 2006 Ford Escape and Mercury Mariner Hybrids as being eligible for the clean-burning fuel deduction. This certification means that taxpayers who purchase one of these hybrid vehicles new during calendar year 2005 may claim a tax deduction of up to $2,000 on Form 1040.

The deduction was scheduled to reduce to $500 in 2006 but a new credit has now replaced this deduction, effective January 1, 2006. There may be tax incentives to wait until 2006 for those new purchases. (See New Tax Credits for 2006.)

More details are available from the IRS web site.

Here is a link that lists all the models that qualify (at least as of when this news item was recorded).

"Tax software is no substitute for tax knowledge."

Any views expressed herein are based on our best information. The content of this web site was written as general information without specific individual information and thus may not apply in all situations. This material was not written, and cannot be used by the taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer.

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Janelle Ogg, EA
Richard Ogg, EA