Diesel Fuel Tax Credit

Tax payers who choose clean fuel auto options are, in some cases, eligible to a diesel fuel tax credit, which are designed to stimulate tax payers to go green. For 2009 qualifying models and their respective diesel fuel tax credit rates include Mercedes GL 320 Bluetec ($1,800), Mercedes ML 320 Bluetec ($900), Mercedes R 320 Bluetec ($1,550), Volkswagen Jetta 2.0L TDI sedan ($1,300) and Volkswagen Jetta 2.0L TDI SportWagen ($1,300). A tax credit is a specified sum of money deducted off the total of federal income tax that has to be paid at the end of the year, meaning the tax burden becomes lighter for the payer.

Different states may offer different diesel fuel tax credit schemes therefore it is advisable to do some research before buying a model that qualifies. As new models are launched, the list of qualifying vehicles is constantly being added to as well. It's worthwhile finding out whether there are other types of fiscal incentives for clean diesel fuel vehicles.

A few considerations to bear in mind: in general, diesel fuel tax credit is a non-refundable tax credit, that is, the tax payer doesn't get money back when it is higher than the amount of income tax to be paid. The excess cannot be carried over to another year, or given away to another person, although this may vary from state to state so always double check it. Buying with the intention of re-selling is not allowed either. The diesel fuel tax credit is available to individuals as well as businesses, including those people who are self-employed. Finally, insurance companies sometimes offer discounts to owners of cars running on clean diesel fuel.