Federal tax law allows individuals to claim a deduction for the incremental cost of buying a motor vehicle that is propelled by a clean-burning fuel. These hybrid vehicles combine an electric motor with a gasoline-powered engine.

The IRS has now certified the model year 2005 Ford Escape Hybrid as being eligible for the clean-burning fuel deduction. The certification means taxpayers who purchase this vehicle new may claim a tax deduction of $2,000 on form 1040 Individual Income Tax Return.

Under the recently signed Working Families Tax Relief Act of 2004, the clean-burning fuel deduction is up to $2,000 for certified vehicles first put into service in 2004 and 2005. The deduction will be limited to $500 for vehicles placed in service in 2006 and no deduction will be allowed after that year.

The other vehicle eligible for the clean-burning fuel deduction for model year 2005 is the Toyota Prius.

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Further information:
www.irs.gov/newsroom/article/0,,id=132163,00.html