Hybrid Cars And Alternative Motor Vehicles

Vehicles Purchased or Placed in Service in 2006 - Updated Oct. 20, 2006:
The Energy Policy Act of 2005 replaced the clean-fuel burning deduction with a tax credit. A tax credit is subtracted directly from the total amount of federal tax owed, thus reducing or even eliminating the taxpayer’s tax obligation. The tax credit for hybrid vehicles applies to vehicles purchased or placed in service on or after January 1, 2006.

Internal Revenue Service