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The alternative fuel tax credit is here to provide a little incentive to think in a more environmentally friendly way.

The term alternative fuel is meant to refer to:

  • Liquefied petroleum gas (propane)
  • P series fuels
  • Liquefied hydrogen
  • Any liquid fuel derived from coal through the fischer-tropsch process according to certain carbon capture guidelines
  • Compressed or liquefied gas derived from biomass

The alternative fuel tax credit for hybrid vehicles expired on December 31st of 2010 so the 2010 tax return will the last year you can claim it. This is still relevant for those who have not yet filed a 2010 return or need to amend one. That expiration was only for gas-electric hybrid vehicles however.

There are still alternative fuel tax credits for full on electric vehicles which will be worth up to $7,500. There is a list of qualifying hybrid vehicle models and you need to make sure that you understand which models will qualify and which won’t. . There are more details to consider as they come up in regards to your specific situation, so from here your journey for information on claiming the alternative fuel tax credit continues.

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