Frequently asked questions

A federal deduction for the interest you pay on a loan used to buy a new car, minivan, van, SUV, pickup truck or motorcycle with final assembly in the United States and a GVWR under 14,000 lb. It was added by the One Big Beautiful Bill Act (IRC §163(h)(4)) and runs for tax years 2025 to 2028.

Up to $10,000 of interest per tax year - per return, not per loan. A typical auto loan pays $2,000 to $6,000 of interest in the first year, so many qualifying buyers deduct the whole amount. Run your own numbers →

Tax years 2025, 2026, 2027 and 2028 - that is, taxable years beginning after December 31, 2024 and before January 1, 2029. Interest paid after 2028 is not deductible under the law as written.

No. This site is an independent tool with estimates based on primary sources. It is not affiliated with the IRS or any government agency, and it cannot take account of your whole tax situation. Confirm anything important with the IRS instructions or a tax professional.

No. Original use must begin with you - you have to be the first person to take delivery after the vehicle is sold, registered or titled. A certified pre-owned or dealer-demo vehicle does not qualify, however US-assembled it is.

No. Final assembly must be in the United States. Cars with high US parts content can still be finally assembled in Canada or Mexico and fail this test. The window sticker's "Final Assembly Point" and the plant code in VIN position 11 are the evidence.

Motorcycles qualify if they are manufactured primarily for public roads, have at least two wheels and meet the other tests. Our VIN checker handles motorcycles; they have no model page yet because motorcycle makers are not in NHTSA's Part 583 reports.

Generally no. Most motorhomes exceed the 14,000 lb GVWR limit, and vehicles that are not manufactured primarily for public-road use are outside the definition. If you are considering a camper van conversion, check the GVWR on the door-jamb label and the vehicle type on the title.

Not directly. What matters is the loan date and whether the vehicle is new. A previous-model-year vehicle sold new after December 31, 2024 qualifies; a current-model-year vehicle that somebody else drove first does not.

Only if personal use is not expected to be more than 50% of the expected use of the vehicle at the time of the loan. A car used mostly for business fails. If you use it personally 70% of the time, it passes that test.

No. Lease payments are not interest on a qualifying loan, and buying out your own lease generally fails the "new" test because original use began with the lessor.

A refinance of a qualifying loan still qualifies if the new loan is secured by a first lien on the same vehicle, but only up to the outstanding balance at the refinance date and the remaining term of the loan being replaced. Cash-out amounts do not qualify. See the refinancing guide.

No. There is no interest, so there is nothing to deduct. The deduction is for interest on a qualifying loan, not for buying a vehicle.

No. The indebtedness itself must be incurred after December 31, 2024, so a loan taken out in 2024 never qualifies - even for interest paid in 2025. You could refinance into a new loan, but the refinance rules only carry over qualifying interest, and there was none.

Yes, if each car and each loan qualifies - but the $10,000 cap covers the total qualifying interest on your return for the year, so two loans share one cap. Add the interest together, then cap it.

They are separate. The clean vehicle credit (IRC §30D) reduces the purchase price or your tax, and it does not reduce the interest you can deduct. If your EV qualifies for both, you can generally claim both, subject to your own return.

The deduction is reduced by $200 for every $1,000, or part of $1,000, of MAGI above $100,000 - or above $200,000 on a joint return. At the $10,000 cap it reaches zero at $150,000 single ($250,000 joint). Smaller amounts of interest phase out sooner.

$100,000 for both. The final regulations confirm that only married filing jointly gets the $200,000 threshold. Head of household does not get the higher figure.

No. This is a below-the-line deduction that you claim on Schedule 1-A whether or not you itemise. It does not reduce your adjusted gross income.

Schedule 1-A (Form 1040), Part IV, lines 22 to 30. Line 22 is the VIN; lines 23 to 30 are the arithmetic. The line-by-line guide →

Then the deduction is not allowed - the statute makes the VIN a condition of the deduction, not a detail. If you filed without it, the return can be amended.

The Vehicle Loan Interest Statement - a new lender form reporting the interest you paid on a qualifying vehicle loan. Lenders receiving $600 or more of interest must file it. Full explanation →

That is expected. Under IRS Notice 2025-57 lenders got transition relief for 2025 and may simply make the total interest available to you - on your annual statement or online. You can still deduct; add up the interest portions of your payments or ask your lender for the total.

Use your lender's figure. Extra payments, late charges and early payoff all change the schedule, and the lender's record is the evidence. Our calculator has boxes for the interest you actually paid each year.