IRS TAX UPDATE FOR 2010Qualified Alternative Fuel Motor Vehicles (QAFMV) and Heavy Hybrid Vehicles
The Alternative Motor Vehicle Credit, enacted by the Energy Policy Act of 2005, provided
for four separate credits for different types of energy efficient vehicles. The amount of the
potential credit varies by type of vehicle and which of the four credits applies. The vehicles
(on the IRS list) qualify as either Qualified Alternative Fuel Motor Vehicles (QAFMV) or
Qualified Heavy Hybrid Vehicles. More information on passenger automobile and light
truck hybrid vehicles can be found at http://www.irs.gov/newsroom/article/0,,id=157557,00.html
while heavy vehicle information is located at http://www.irs.gov/businesses/article/0,,id=175456,00.html
QAFMV vehicles may be either new, original equipment installation vehicles or prior use vehicles
which have been repowered to use an alternative fuel by an aftermarket installer. Qualifying Alternative
fuels include compressed natural gas, liquefied natural gas, liquefied petroleum gas, hydrogen
and any liquid, at least 85 percent of the volume of which, consists of methanol.
Clearly, the opinion shown below, issued in 2006, still applies.
IRS OFFICIAL TAX CREDIT OPINION
The opinion expressed below, comes from a Mr. Jacobs,
IRS Complex Tax Law Representative, 75-15658
"IRS Form 8911 clearly states that this (Hydrogen Generator) would qualify as
alternative fuel vehicle refueling property because it is injecting hydrogen
into a motor vehicle.
"Since you (may) have both personal and business use of a vehicle, you would
figure the credit on form 8911 as follows:
"Based upon the percentage of business use of the vehicle you would
multiply the cost of the property (typically, $800 + installation costs) times that
percentage of business use and put that amount on line 2 of the form
(The total cost of the equipment would have been placed on line 1.
"Line 5 will figure the credit based upon 30% of the line 2 amount.
This portion of the credit will go to IRS form 3800, line 1w.
"The remainder of the cost of the property will be placed on form 8911,
line 10 and 30% of that amount will be computed there. This personal
use portion of the credit will go to your tax return form 1040, line 55.
"Please note that this is a non-refundable credit. In both cases the
credit can reduce income tax but not create a refund and is subject to
alternative minimum tax limits.
"Also note that when you bring the business portion of the credit to the
Form 3800, that will come over to form 1040 as a non-refundable credit.
Therefore when you get to line 15b of Form 8911 that business portion
of the credit will pop up again."
Be sure to check with your tax professional to make sure you can use these credits.
To access the IRS Web site for Form 8911, Click on the following link:
To use this form, you'll need the free Acrobat Reader that you can obtain below
if you don't already have it.