FTB clarifies: "Cash for Clunkers" tax rules.

• Author: Josephs, Stuart R.
• Position: IRS NEWS

The "Cash for Clunkers" program (H.R. 2346) allows qualifying consumers to receive a $3,500 or $4,500 voucher from the federal government when they trade in qualifying old vehicles and purchase or lease a new one.

The law provides that the value of the voucher received by the consumer is not considered as gross income of the purchaser for purposes of federal income tax.

California law does not conform to H.R. 2346. For state income tax purposes, tradeins are...