During a visit to Detroit on Jan. 13, Treasury Secretary John Snow announced the issuance of Internal Revenue Service (IRS) guidance regarding the tax credit for hybrid vehicles. The credit, which was enacted by the Energy Policy Act of 2005, may be as much as $3,400 for those who purchase the most fuel-efficient vehicles.

“This IRS guidance establishes a process that manufacturers can use to certify the amount of credit the purchaser of the vehicle can claim. This is going to provide much-needed certainty to Americans who are purchasing these vehicles. It means they will be able to rely on the manufacturer’s certification when they claim the credit on their tax return. This is good news for those consumers because they are also taxpayers who seek simpler, fairer tax filing, and it is good news for manufacturers who can now offer reassurance to customers on the ease of the tax rules,” Snow said.

The Energy Policy Act also provides tax credits for motor vehicles that are not covered by today’s guidance. The other vehicles eligible for credits are fuel cell vehicles, alternative fuel vehicles, and hybrid heavy trucks. The IRS will issue guidance providing certification procedures for these vehicles in the near future.