New Car? Remember the Tax Credit

Early in the year the government announced the new car tax credit as part of the economic stimulus package. There hasn’t been much attention given to this lately, but if you bought a car this year (or plan to purchase before Dec. 31) don’t short yourself on this break.

The credit allows you to deduct sales and excise taxes and other fees on as much as $49,500 of the purchase price.

Most important—Applies Only to NEW Cars

Only brand-spanking new car purchases qualify. So if it’s used, but new to you, the purchase doesn’t qualify for the credit. But, any car, light truck, motor home, or motorcycle counts

More Details

You must have completed your purchase between February 17, 2009 and December 31, 2009.

The credit is limited to the taxes on vehicles with a purchase price up to $49,500. If the vehicle costs more you can still get credit, but only for the taxes on $49,500 of it.

The income limit is high enough to make it easy for you to qualify. The credit to phase begins at $125,000 for individuals and $250,000 for couples.

You won’t receive this credit at the time of sale. You can claim the credit as on your 2009 taxes. You do not need to itemize credit.

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