Auto Loan Interest Deduction Calculator
Check if you qualify for the new federal auto loan interest tax deduction. For tax years 2025-2028, eligible taxpayers can deduct up to $10,000 annually in interest paid on qualifying new auto loans—even if you take the standard deduction.
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Personal Information
Phase-out begins at $100,000
Vehicle Information
Original use must begin with you. Used vehicles and leases don't qualify.
Check your window sticker or use the NHTSA VIN Decoder to verify.
Commercial or fleet vehicles do not qualify.
Must be after December 31, 2024, and before January 1, 2029.
Loan Information
Loan must be originated after December 31, 2024.
The lender must have a lien on the vehicle.
Enter the total interest paid during the tax year. Maximum deduction is $10,000.
Eligibility Status
Fully Eligible
Requirements Checklist
Important Information
- • You must include the Vehicle Identification Number (VIN) on your tax return when claiming this deduction.
- • Claim this deduction on Schedule 1-A, an attachment to Form 1040.
- • Retain your purchase contract and year-end interest statements from your lender.
- • This deduction is available even if you take the standard deduction.
Understanding the Auto Loan Interest Deduction
The new federal auto loan interest deduction, effective for tax years 2025 through 2028, allows eligible taxpayers to deduct up to $10,000 annually in interest paid on qualifying new auto loans. This deduction is available even if you take the standard deduction, making it accessible to most taxpayers.
Income Phase-Out Thresholds
The deduction phases out for higher-income taxpayers:
- Single Filers: Phase-out begins at $100,000 MAGI, fully phased out at $150,000
- Married Filing Jointly: Phase-out begins at $200,000 MAGI, fully phased out at $250,000
Qualifying Vehicle Requirements
- Must be a new vehicle (original use starts with you)
- Final assembly must be in the United States
- Must be for personal use only
- Gross vehicle weight rating must be under 14,000 lbs
- Eligible vehicle types: cars, minivans, vans, SUVs, pickup trucks, motorcycles
Loan Requirements
- Loan must be originated after December 31, 2024
- Loan must be secured by a lien on the vehicle
- Vehicle must be purchased before January 1, 2029
- Refinanced loans may qualify for the original debt amount
How to Claim the Deduction
- File using Schedule 1-A (attachment to Form 1040)
- Include the vehicle's VIN on your tax return
- Keep your purchase contract and interest statements
- Lenders will provide Form 1098-like statements for qualifying interest
Verify Final Assembly Location
To confirm your vehicle was assembled in the United States, check the window sticker at the dealership or use the NHTSA VIN Decoder. Enter your vehicle's VIN to see the plant of manufacture location.
What Does NOT Qualify
- • Used vehicles
- • Leased vehicles (lease payments don't qualify)
- • Vehicles assembled outside the United States
- • Commercial or fleet vehicles
- • Vehicles with gross weight rating of 14,000 lbs or more
- • Loans originated before January 1, 2025
Disclaimer: This calculator is for educational and illustrative purposes only. Results are estimates and may not reflect actual outcomes. Investing Point does not guarantee the accuracy of these calculations and is not responsible for any decisions made based on this tool. Consult a qualified tax professional for personalized advice.
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