Cash for Clunkers Tax: Rebate taxable or not?

We have not been short of “Cash for Clunkers” news over the last few weeks, and this includes news of a voucher system, success vs. hype of the program, and spin-offs like the cash for ‎refrigerators and appliances idea.

Now that the ‘Cash for Clunkers’ program has closed, what next for consumers that had the up to $4,500 rebate? Tax would be the quick answer to that.

According to keloland.com, Cash for Clunkers has tax implications. They state that “up to $4500 dollars for every clunker is taxable”. Did you think the government’s rebate is taxable?

They continue to advise that you should make sure the dealer gets all the paperwork to you, if you are late, you may end up paying extra penalties and interest. Read the full details on Keloland.

Update: Now if you visit the official site for CARS, you can see that they state “NO. The CARS Act expressly provides that the credit is not income for the consumer”. Have a read of both sources, and feel free to share your thoughts in the comments.