Tax Break for New “Cash for Clunkers” Program: Do You Qualify for Auto Consumer Stimulus Tax Credit?
This week, President Obama signed into law the Car Allowance Rebate System (C.A.R.S.) - a program that pays consumers up to $4,500 in tax credit for trading in their cars or trucks for more fuel efficient vehicles.
As the New York Times reports, you will need to check if your vehicle qualifies for the trade-in credit. You can check out The National Highway Traffic Safety Administration web site to see if you are eligible to participate in the program. Generally, to qualify your car must be:
• at most 25 years old.
• gets 18 miles a gallon or less.
• drivable.
• registered.
• insured for the past year.
The government, which is very focused on bailing out the devastated automotive industry, is allocating $1 billion for the program.
CCH (http://tax.cchgroup.com/) reports:
President Obama on June 24 signed legislation aimed at boosting the sale of vehicles at financially struggling U.S. automobile dealerships. The so-called “cash for clunkers” program provides $1 billion in tax-free vouchers to automobile dealers who participate in the new program. The program vouchers, worth $3,500 or $4,500, will be given to dealers when consumers trade in old vehicles for ones with higher fuel efficiency. The vouchers will not be considered taxable income for the car buyer.
The new law limits the number of vouchers to one per customer, including joint registered owners of a single eligible trade-in vehicle. The car voucher measure is included in the 2009 Supplemental Appropriations Bill for Iraq, Afghanistan, Pakistan and Pandemic Flu (HR 2346).
By Paula Cruickshank, CCH News Staff
More Tax Help, IRS News and Tax Relief Tips:
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- KLOS Tax Tip #44: Individuals Get a Tax Break - But Get Tax Help if You Owe Back Taxes!
- Retire Your IRS Back Taxes Forever: How Tax Resolution Services Helped Save a Taxpayer $130,000
Tags: auto consumer stimulus, car allowance rebate system, cash for clunkers, CCH News, IRS help, Michael Rozbruch, new tax laws, tax advice, tax break, tax credit, tax expert, tax help, tax-free holiday, taxable income
June 27th, 2009 at 3:50 pm
Cash for Clunkers has another negative consequence. It will hurt donations of cars to charity because the voucher is much greater than the tax deduction for donating a car. Congress could have stimulated car sales by simply returning to allowing car donors to claim the book value as their tax deduction. Since most donated cars are recycled, there would be an environmental benefit as well.
July 27th, 2009 at 3:02 pm
[...] PDRTJS_settings_104774_post_2440 = { “id” : “104774″, “unique_id” : “wp-post-2440″, “title” : “%22Cash+For+Clunkers%22+-+So+You+Think+You+Qualify%3F”, “item_id” : “_post_2440″, “permalink” : “http%3A%2F%2Fconservativewanderer.wordpress.com%2F2009%2F07%2F27%2Fcash-for-clunkers-so-you-think-you-qualify%2F” } The Car Allowance Rebate System (C.A.R.S.) or “Cash for Clunkers” seems like a good deal, but there are always catches to everything. There is no such thing as a “free lunch” [Article - 1. What is the Car Allowance Rebate System? | 2. Tax Break for New “Cash for Clunkers” Program: Do You Qualify for Auto Consumer Stimulus Tax Cre...]. [...]
August 7th, 2009 at 12:02 pm
[...] replenishment of the CARS fund will allow Americans to continue enjoying non-taxable cash vouchers when they trade in their old gas guzzlers for new energy-efficient vehicles. (The vouchers are only [...]