Ventura Auto Center

If you purchased a new car last year between February 17 and December 31, then you might qualify for the new car tax credit that was part of the 2009 stimulus package.

In order to be eligible, the deal must have already been completed as of December 31, 2009. The vehicle needs to be new, not pre-owned or used. Cars, motorhomes, light trucks and motorcycles all qualify. The credit only applies to the taxes on vehicles with a purchase price of at most $49,500. If your new car cost more than that, you can only deduct the taxes on $49,500 of the total price.

As for the income limit, the credit begins to phase out at $125,000 for individuals and $250,000 for couples. Incomes of $135,000 and up for individuals and $260,000 and up for couples do not qualify anymore. The credit is limited to the local, sales, and excise taxes related to the purchase. Fees collected by states that do not have sales taxes qualify as well. Residents of Alaska, Delaware, Hawaii, Montana, New Hampshire and Oregon should consult the IRS to know which particular fees qualify.

So how do you claim the new car tax credit? You’ll receive it when you file your taxes for 2009, which are due on April 15, 2010. Since this is an “above the line” credit, you do not have to itemize your taxes. If you do, you need to include the sales tax on Schedule A or complete 1040 Schedule L to find out your deduction. Note: 1040 Schedule L is different from 990 Schedule L.

For more information on the New Car Tax Credit.