Most people should be aware that its possible to get tax-credits for purchasing a hybrid vehicle. However, the system is complex and its important to know how this will work in your individual circumstances.

Under the Energy Policy Act of 2005 the Government replaced clean fuel burning deductions with a tax credit for the purchase of certain vehicles.

There are a number of conditions its important to remember:

1. The vehicle must have been purchased after January 1st 2006

2. It cannot be a lease

3. The tax credit is time-limited - after the manufacturer sells 60 000 vehicles it is progressively reduced over the next 4 quarters (Toyota is the only manufacturer to reach this benchmark as of June 2006)

Tax-credits range from $600 to $3150 so they can represent a powerful incentive for puchase.

To ensure access to the most up-to-date information - it is worth the IRS at the time of purchase or checking out their website on www.irs.gov