Q:

Does the Toyota Prius Plug-in Hybrid qualify for a federal tax credit?

A:

Quick Answer

As of July 2015, 2012 to 2015 Toyota Prius Plug-in Hybrids qualify for a $2,500 federal tax credit, according to the U.S. Department of Energy. Taxpayers wishing to claim the credit must fill out Form 8936, Qualified Plug-in Electric Drive Motor Vehicle Credit, states the Internal Revenue Service.

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Full Answer

Federal tax credits do not apply at the time of purchase; rather, they reduce the tax owed, explains The Washington Post. Taxpayers who owe less than the amount of the credit are not refunded the additional amount. Tax credits for hybrid vehicles are only available to taxpayers who purchase a new qualifying vehicle, meaning the credit does not apply for used vehicle purchases, cautions The Washington Post. A new 2015 Prius Plug-in Hybrid starts at a manufacturer's suggested retail price of $29,990 as of July 2015, according to Toyota.

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