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.) – aÂ 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:
â€˘ at most 25 years old.
â€˘ gets 18 miles a gallon or less.
â€˘ 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
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