Fusion/Milan Hybrid Credit Clarification

[KCM1]

There has been a lot of discussion on this subject lately, so thought I would do some research to clear it up. The main question is what constitutes a purchase in terms of the credit, buying the car or taking possession of the car. Here is an article from Ford Media about the credits available:

 

http://media.ford.com/article_display.cfm?article_id=29778

 

Notice that the credit does not disappear completely on March 31, 2009, but is reduced by half.

 

Tax Credit Amount:

 

1/1 - 3/31/09: $3400

4/1 - 9/30/09: $1700

10/1/09 – 3/31/10: $850

4/1/10 and later: $0

 

Now from the IRS.gov site:

http://www.irs.gov/newsroom/article/0,,id=157557,00.html

 

This excerpt should clear things up:

 

"Notice 2006-78 announced the credit phase out schedule for advanced lean burn technology vehicles and hybrid vehicles manufactured by Toyota Motor Sales USA, Inc. (Toyota and Lexus vehicles). For the period of 10-1-06 to 3-31-07, purchasers of qualifying vehicles are eligible for 50% of the allowable credit. For the period of 4-1-07 to 9-30-07, purchasers of qualifying vehicles are eligible for 25% of the allowable credit. The table below includes both the full credit and the reduced credit amount depending upon when the vehicle was purchased.

 

The date of purchase determines the amount of the credit available for a vehicle, i.e. whether a vehicle is eligible for the full credit or whether a portion of the credit is phased-out. The placed in service date determines the taxable year in which the credit may be claimed.

 

For example, if consumer A purchases a Prius on Sept. 30, 2006, and takes possession in February 2007, consumer A can claim the full credit for 2007, the year in which the vehicle is placed in service. On the other hand, if consumer B purchases a Prius on Oct. 1, 2006, and takes possession of the vehicle in February 2007, Consumer B can claim 50% of the credit in 2007, the year in which the vehicle is placed in service."

 

Since the Prius credit was reduced by half on 10-1-06, the consumer B could only claim half, while consumer A buying it one day earlier could claim the full amount. Taking possession of the vehicle is not the determining factor. So by this, if someone buys a Fusion/Milan hybrid no later than 3-31-09, but does not receive it till August, they would still get the $3400 credit. After that, they would get less of a credit. Possession date, or when it is put in service, only affects what year it can be claimed on for taxes.

 

The official purchase date most likely could be worked out with your dealer at the time of the order to get the credit. I would think putting down a deposit would be enough to determine the purchase date, or the full amount surely would. I suppose this would just be up to what the dealer is willing to do to help the customer out, essentionally what they will put down in writing as the purchase date.

 

Additional reference information on the subject and on claiming the credit:

http://www.fueleconomy.gov/feg/tax_hybrid....#phaseoutAnchor

 

Hope this helps.

[NickF1011]

So if you pay for the car up front, you can claim the credit.

 

Now, I'm not sure who in their right mind would purchase a car up front that they've never even driven before. :shrug:

[KCM1]

So if you pay for the car up front, you can claim the credit.

 

Now, I'm not sure who in their right mind would purchase a car up front that they've never even driven before. :shrug:

 

Or maybe just with a deposit, depending on if the dealer is willing to put that down as the purchase date and help the customer out.

[NickF1011]

Or maybe just with a deposit, depending on if the dealer is willing to put that down as the purchase date and help the customer out.

 

Hmmm...for some reason that doesn't sound legal. :unsure:

[KCM1]

Hmmm...for some reason that doesn't sound legal. :unsure:

 

I'm no lawyer, but don't think it would be. When you agree to buy the car before March 31 and give them a down payment, you are agreeing to a binding purchasing contract (and likely signing your name to it) that you will pay the rest when it arrives. This would be the purchase date. If it arrives and you back out and don't pay for the car, the dealer could legally make you buy it, or more likely, keep the deposit and just add it to their inventory. The contract would then be fulfilled or voided. If for some reason it doesn't come in, or is not what you ordered, then the contract could be voided and you would get your money back, or the dealer would have to get you what you ordered.

 

As for the purchase date, I guess it would depend on when the dealer considers it sold, when the agreement is made, or when it leaves the lot. I don't know enough about the way the dealerships work to answer that. I know at small town dealers, they are many times more willing to work with the customer than a big city dealer.

Edited February 24, 2009 by KCM1

[joe308]

My accountant told me to get all the proof you can get as Ford and the dealer cannot be held liable next year if you are refused the credit by the IRS. This means in addition to a written order and deposit, get a copy of the VOC and DORA dated prior to 3/31. From what I read there are very few production Hybrids (if any at all) that could actually be "delivered" to retail customer prior to 3/31. If you had to have your financing in place and take posession prior to 3/31 the whole credit would be a scam and nobody would be geting it. Good luck to all!

 

I'm no lawyer, but don't think it would be. When you agree to buy the car before March 31 and give them a down payment, you are agreeing to a binding purchasing contract (and likely signing your name to it) that you will pay the rest when it arrives. This would be the purchase date. If it arrives and you back out and don't pay for the car, the dealer could legally make you buy it, or more likely, keep the deposit and just add it to their inventory. The contract would then be fulfilled or voided. If for some reason it doesn't come in, or is not what you ordered, then the contract could be voided and you would get your money back, or the dealer would have to get you what you ordered.

 

As for the purchase date, I guess it would depend on when the dealer considers it sold, when the agreement is made, or when it leaves the lot. I don't know enough about the way the dealerships work to answer that. I know at small town dealers, they are many times more willing to work with the customer than a big city dealer.

[swsaint]

My accountant told me to get all the proof you can get as Ford and the dealer cannot be held liable next year if you are refused the credit by the IRS. This means in addition to a written order and deposit, get a copy of the VOC and DORA dated prior to 3/31. From what I read there are very few production Hybrids (if any at all) that could actually be "delivered" to retail customer prior to 3/31. If you had to have your financing in place and take posession prior to 3/31 the whole credit would be a scam and nobody would be geting it. Good luck to all!

 

There are vehicles already at dealerships available for sale. Based on the IRS examples, if you have a confirmed order by the 31st of March, you should qualify for the full tax credit, otherwise you will still qualify for $1700 for purchases through August or sometime in the fall (forgot the exact date)

 

Ford is processing the hybrid orders differently until March 31, 2009 so that they can confirm orders. This involves the salespeople faxing your order as well as a copy of your driver's license to confirm it is a real order and not some dealer scam.

[joe308]

My dealer faxed my license to Ford as well. A few days later they got an email back from Ford program HQ stating the order was "accepted".

That was on 3/20 - still no word on a build date yet, but from what other people have posted it will take another week or 2 before I hear anything.

[dfs]

If you purchased/ordered your Fusion/Milan Hybrid before 4/1, you should complete the 8910 form in 2010 (for the 2009 tax year). Put down the date you took delivery as the in-service date. Show $3,400 as the tax credit and claim 100% since you purchased the vehicle before 4/1.

 

If your purchase order is after 3/31, claim 50%.

[akirby]

If you purchased/ordered your Fusion/Milan Hybrid before 4/1, you should complete the 8910 form in 2010 (for the 2009 tax year). Put down the date you took delivery as the in-service date. Show $3,400 as the tax credit and claim 100% since you purchased the vehicle before 4/1.

 

If your purchase order is after 3/31, claim 50%.

 

Assuming you actually take delivery in 2009.

[dfs]

Assuming you actually take delivery in 2009.

 

Ford must feel pretty good that all units ordered retail before June 30, will be built this year. Once the Hybrids go back on regional allocation, all bets are off.

 

If you wait until Sept 30, 2009 to order (and still quality for the $1,700 tax credit), you might not see your unit until 2010. If that happens, you will have to wait until 2011 to claim the 50% credit for 2010.

 

I keep thinking that there must be a lot of sales personnel in the dealerships that don't understand the open allocation implications. They were used to not being able to get Escape Hybrids, because allocations were so tight, that they forgot to pump up the Fusion Hybrid interest with their customers. I was inquiring at one dealership and the salesman immediately tried to sell me off the hybrid - "Hard to get, no deals, first responders won't touch them, expensive battery replacement cost, etc.". I concluded that he just want to sell me something "Today" - not several weeks later.

 

Quite frankly, I feel like the members of this forum know as much or more about the vehicles than many of the sales people do. We certainly understand our motivations better than they do. :shades:

[aea6574]

If you purchased/ordered your Fusion/Milan Hybrid before 4/1, you should complete the 8910 form in 2010 (for the 2009 tax year). Put down the date you took delivery as the in-service date. Show $3,400 as the tax credit and claim 100% since you purchased the vehicle before 4/1.

 

If your purchase order is after 3/31, claim 50%.

 

This is the thought I was going with. My DORA is dated 3-16-09 so I believe I should get the full $3400.

 

Right?

 

Best regards, tony

Northville, MI

[dfs]

This is the thought I was going with. My DORA is dated 3-16-09 so I believe I should get the full $3400.

 

Right?

 

Best regards, tony

Northville, MI

 

 

Yes, you should qualify for the full $3,400 credit. Keep a copy of your purchase order and DORA/confirmation (dated before 4/1) with your tax records.

 

Some people don't pay federal income taxes, so the $3,400 won't do anything for them, and some people are caught up in the AMT calculation, so they may not get the full tax credit --- but most of us will get it. :happy feet: :happy feet: