Driving a hybrid car has many established advantages, such as increased fuel economy, energy conservation and reduced fuel dependence. Plug-in and conventional hybrid owners also often take pride in contributing to a healthier environment for future generations. But not all drivers realize that owning certain models, such as the Honda Clarity Plug-In Hybrid, also qualifies them for federal tax benefits, like the Qualified Plug-In Electric Vehicle (PEV) Tax Credit. Here is more information about this and other incentives available to Honda owners and how they work. What is the PEV Tax Credit? The Qualified PEV Tax Credit offers a minimum $2,500 and a maximum $7,500 tax credit for each new qualifying electric vehicle purchased in the U.S after January 1, 2010. As of January 2018, more than 25 all-electric and plug-in models qualify, including the Plug-In Clarity. Credit amount and eligibility are based on several factors, including:

• Battery capacity of at least five kilowatt-hours
• External source of energy to recharge the battery
• Gross vehicle weight rating (GVWR) of up to 14,000 pounds
• Meets specific emission standards

To claim the credit, fill out IRS Form 8936 and report the credit on the appropriate line of Form 1040 on this year’s taxes. Commercial drivers will report the credit on IRS Form 3800. Phase Out and Other Stipulations The credit will eventually be phased out individually for each manufacturer. This has not yet begun for Honda, so drivers can still take advantage. The phasing out process is slated to begin at the start of the second quarter after 200,000 eligible electric or plug-in vehicles are sold. There are other stipulations associated with the tax credit potential buyers should be aware of, such as:

• It does not typically apply when leasing
• It does not apply to a vehicle purchased solely for resale
• The vehicle must be made by a qualified manufacturer, such as Honda

The Internal Revenue Service (IRS) can reject credit eligibility at its discretion Washington Incentives Though Washington has already exceeded the 7,500 sales threshold for the Alternative Fuel Vehicle Tax Exemption, Honda drivers can still take advantage of several other incentives. For instance, the Alternative Fuel Vehicle and Hybrid Electric Vehicle Emissions Inspection Exemption stipulates that dedicated electric, natural gas and propane vehicles are exempt from completing state emissions control inspections. Hybrid electric vehicles (HEVs) that obtain an Environmental Protection Agency (EPA) fuel economy rating of at least 50 mpg city are also exempt. Business owners also have reason to make the switch to environmentally-friendly transportation. The Alternative Fuel Commercial Vehicle Tax Credit offers eligible businesses tax credits for purchasing new alternative fuel commercial vehicles, such as electric cars. From now until January 1, 2021, the following maximum tax credits are available based on GVWR:

• Up to 14,000 pounds: $25,000
• 14,001 to 26,500 pounds: $50,000
• More than 26,500 pounds: $100,000

2018 Honda Clarity Plug-In Hybrid Honda drivers will be happy to hear that the 2018 Honda Clarity Plug-In Hybrid qualifies for the maximum $7,500 PEV Tax Credit. Not only will driving home in an all-new Clarity save you money come tax season, but you will also be able to take advantage of the countless features and benefits provided by Honda. The Clarity uses a high-powered electric battery and an internal combustion engine. The car has zero emissions when running on electricity, and seamlessly switches to its gas-powered engine when the battery is low, offering a 340-combined gas and electric driving range. Shop for New Hondas in Seattle Today Honda of Seattle has a large selection of 2018 Honda Clarity Plug-In Hybrids available to test drive today. We also have many other hybrid and traditional Honda vehicles in stock. View our inventory and schedule a test drive by visiting us online or give us a call at 206-382-8800.