Car Loan Interest Tax Deduction
Car Loan Interest Tax DeductionDeduction
Qualifying New Kia Vehicles
Choose from eligible new Kia models, all assembled in West Point, Georgia:
Key Requirements for Program Qualification
One Big Beautiful Bill Act – car loan interest tax deduction is a groundbreaking new tax benefit that allows taxpayers to deduct up to $10,000 per year in interest on loans for new U.S. assembled vehicles from 2025–2028. This provision, part of the One Big Beautiful Bill Act of 2025, aims to support American manufacturing and provide significant tax savings for vehicle owners. Below, you’ll find a comprehensive list of qualifying vehicles and all the key requirements you need to know to claim this deduction.
To qualify for the One Big Beautiful Bill Act car loan interest tax deduction, your vehicle and loan must meet all of the following criteria:
| Requirement | Description |
|---|---|
| Vehicle Type | New car, minivan, van, SUV, pickup truck, or motorcycle |
| Original Use | Must commence with taxpayer (new vehicle only) |
| Final Assembly | Must occur in the United States |
| Weight Limit | GVWR under 14,000 lbs |
| Loan Origination | Must be originated after December 31, 2024 |
| Loan Security | Must have a first lien on the vehicle |
| Use | Personal use only (not for fleet, commercial, or lease purposes) |
| VIN Reporting | Vehicle Identification Number must be included on the tax return |
| Annual Deduction Limit | Up to $10,000 per year |
| Income Phaseout | Deduction reduced $200 per $1,000 of MAGI over $100,000 ($200,000 joint); fully phased out at $150,000 ($250,000 joint) |
| Related Party Loans | Not eligible |
| Refinancing | Allowed only up to original principal and must remain secured by same vehicle |
| Reporting | Lender must provide required information to both IRS and borrower |
| Expiration | Applies to tax years 2025 through 2028 only |
Additional Details:
- VIN Check: Vehicles with VINs starting with 1, 4, or 5 are U.S.-assembled.
- Personal Use Only: No business, fleet, or commercial vehicles.
- First Lien Loans Only: Leases and second mortgages do not qualify.
- Above-the-Line Deduction: No need to itemize to claim this deduction.
- New Purchases Only: Applies to vehicles purchased after December 31, 2024.
- Reporting: VIN must be reported on your tax return.
- Temporary: Applies only to tax years 2025–2028.
Stay Updated and Get Expert Help
This information is based on current information and may change as new models are introduced or IRS guidance is updated.
Always confirm eligibility with the latest IRS resources or your tax professional before purchase.
Information Source | JAN 2025
Warranties include 10-year/100,000-mile powertrain and 5-year/60,000-mile basic. All warranties and roadside assistance are limited. See retailer for warranty details.