Owners of hybrid cars can receive government alternative fuel and energy tax credits. Hybrid cars offer several benefits and incentives.

By: Andy Hodges

Hybrid cars are all about alternative energy and fuel efficiency, and the government is using these cars to promote new incentives to reduce carbon emissions.

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Some diesels purchased or placed into service after December 31, 2005 may be eligible for a federal income tax credit of up to $3,400. (No eligible vehicles were manufactured for sale until 2008.)

Credit amounts begin to phase out for a given manufacturer once it has sold over 60,000 eligible hybrid and diesel vehicles

Qualifying alternative fuel vehicles (AFVs) purchased or placed into service between January 1, 2005 and December 31, 2010 may be eligible for a federal income tax credit of up to $4,000.

Vehicles placed into service before January 1, 2005 may be eligible for a $2,000 clean-fuel vehicle tax deduction.