Are There Federal Tax Credits on Clean Diesels?


Dear Driving for Dollars, I was thinking of buying a new car that is powered by a clean diesel engine, and I recently overheard someone mentioning a credit for a diesel on the taxes they just filed. Are there any federal tax credits for clean diesels still available? -- Vinay

Dear Vinay, There are no longer any federal tax credits available for hybrid cars or clean diesels. They were only available for cars purchased in 2010 or earlier. If you heard of someone taking a tax credit for one of these vehicles on their 2011 taxes, the only way that would be possible, according to the Internal Revenue Service, would be if they purchased the car in 2010 but did not put it in service until 2011. For a qualifying vehicle purchased and placed into service in 2010, it would be possible to file an amended 2010 return to claim the tax credit.

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