Overview
- Taxpayers may deduct up to $10,000 per year of interest from qualifying auto loans, with the benefit available for purchases starting in 2025 and running through 2028.
- Eligibility requires a new, personal-use vehicle under 14,000 pounds that was finally assembled in the U.S., which buyers can verify using the NHTSA VIN Decoder or the door-frame sticker.
- The deduction is available to both standard-deduction and itemizing filers, but it phases out between $100,000 and $150,000 MAGI for single filers and $200,000 to $250,000 for joint filers.
- Qualifying loans must be originated after Dec. 31, 2024 and be secured by a lien on the vehicle, and used-vehicle loans do not qualify.
- Treasury and the IRS issued proposed regulations clarifying eligibility and confirming that lenders must file information returns so taxpayers can claim the deduction.