Big Beautiful Bill Vehicle Loan Interest Deduction Provision
Taxpayers can deduct up to $10,000 in interest annually on qualifying vehicle loans. This is an above-the-line deduction, meaning you can claim it even if you take the standard deduction, as it reduces your Adjusted Gross Income (AGI).
Please consult your tax advisor with any questions.
To qualify, both the vehicle and the buyer must meet these criteria:
- New Vehicle Only – Must be a brand new vehicle; used vehicles and leases do not qualify.
- US Assembly – Final assembly of vehicle must occur in the United States (verify via VIN or dealer documentation).
- Personal Use – Vehicle must be for personal, non-commercial use.
- Qualifying Vehicle Types – Cars, vans, minivans, SUVs, pickup trucks, and motorcycles with Gross Vehicle Weight Rating under 14,000 lbs qualify.
- Purchase Date – Loan must have been purchased and originated after December 31, 2024 and before January 1, 2029.
- Loan Type – Interest must be paid on a standard, secured vehicle loan.
The deduction phases out for Modified Adjusted Gross Income over $100,000 (single) or $200,000 (joint). It is reduced by $200 for every $1,000 over the limit, and is fully phased out at incomes of $150,000 (single) and $250,000 (joint).
The IRS did not create a tax form for auto loan interest for the 2025 tax year.
Check your December monthly statement for your Year-to-Date (YTD) interest totals.