Government Car Rebate & $3,500 or $4,500 Voucher
Obama Economic Stimulus Incentives for 2009 New Vehicle Purchases
Jul 12, 2009
The 2009 federal government new car tax rebates and $3,500 and $4,500 vehicle incentives available from the United States have received much coverage in the press and on Suite101 in the recent months.
Below are more facts about both U.S. government stimulus programs for new automobiles authorized by Barack Obama and a discussion of the interplay between the two types of new car incentives for 2009.
2009 New Car Purchases- U.S. Government Car Tax Rebate Facts
Tax rebates (of state and local sales & excise taxes) for certain new vehicle purchases in 2009 were authorized by Barack Obama upon the signing of the American Recovery and Reinvestment Plan of 2009 (otherwise known as the U.S. Economic Stimulus Plan). Below are four facts about the car tax rebates available to United States individuals.
- Even those who live in states with no sales tax are eligible for this stimulus measure.
- New vehicles must be purchased between February 17, 2009 and December 31, 2009
- Sales and other taxes should be paid at the time of purchase, and a rebate should be claimed on a 2009 individual income tax return (due in April 2010).
- The deduction of taxes and fees is capped at a certain purchase price. Only taxes and fees paid on the first $49,500 of a vehicle's purchase price may be claimed under this rebate program.
Obama Economic Stimulus- $3,500 and $4,500 Vehicle Incentive Facts
The United States Consumer Assistance to Recycle and Save Act provides for $3,500 or $4,500 credit vouchers toward the purchase of qualifying vehicles in 2009. Below are seven facts about the “Cash for Clunkers” program for Americans.
- Official website: cars.gov.
- Maximum voucher amount: $4,500.
- Oldest car that can be traded in: twenty-five years old.
- Trade-ins do not have to be American-made.
- Maximum number of miles per gallon a qualifying trade-in can have: new combined 18 MPG.
- The $3,500 or $4,500 voucher cannot offset the cost of a used vehicle.
- Vouchers cannot offset the cost of new luxury vehicles (those with MSRP of over $45,000).
For more details on this automobile incentive program, see the article Cash for Clunkers Rules- Obama New Car Stimulus.
Combine 2009 Federal Government Automobile Incentives
Many Americans familiar with one 2009 new car incentive or the other may not be aware that they might be eligible for a combination of both stimulus incentives.
The rebate of state and local sales and excise taxes (or other costs in states without sales tax) is not available to every American. Only those with modified adjusted gross incomes lower than or equal to $125,000 (or $250,000 for married couples) can take advantage of the full rebate amount.
However, those who qualify to deduct states and local sales and excise taxes on 2009 vehicle purchases may be able to use a $3,500 or $4,500 voucher toward the same purchase. Individuals should analyze the rules for both new car incentives to see if they separately qualify. It is very possible for many Americans with modest incomes to qualify for both incentives if a purchase is carefully considered and researched.
New Car Incentives for Americans- Seek Tax Rebate & Cash for Clunkers Advice
It is highly recommended that individuals seek the advice of a qualified professional (accountant, financial advisor, etc) with regard to the strategy mentioned above.
For further explanation of the income threshold and phase out ranges for the new car tax rebate, see the article New Car Tax Rebate- Obama Economic Stimulus Plan.
Resources:
American Recovery & Reinvestment Act of 2009
Consumer Assistance to Recycle and Save Act of 2009
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