A new federal auto loan interest deduction has been established,
offering financial benefits to qualifying customers.
Deductible Amount
Eligible taxpayers may deduct up to $10,000 in annual interest on loans for qualifying new personal-use vehicles effective for 2025-2028.
Applicability Period
This deduction applies to new Electric Vehicles (EVs), Hybrid vehicles, and Internal Combustion Engine (ICE) vehicles with loans originating between January 1, 2025 – December 31, 2028.
Qualifiers
To qualify for the deduction,
the interest must be paid on a loan that is all of the following:
• Originated after December 31, 2024
• Used to purchase a vehicle,
the original use of which starts with the taxpayer
(Used vehicles do not qualify)
• For a personal use vehicle
(Not for business or commercial use)
• Secured by the first lien on the vehicle
Vehicle Eligibility – U.S. Final Assembly
To qualify, vehicles must have undergone final assembly in the United States. This criterion is identifiable by the Vehicle Identification Number (VIN), where the VINs starting with 1, 4, or 5 indicate U.S. final assembly.
Customer Eligibility
Deduction begins to phase out for taxpayers with a modified adjusted gross income over $100,000 ($200,000 for joint filers).
Important Information
This is not legal advice. Planet Ford Dallas, nor any of its employees, offer legal or tax advice.
Customers should always speak to their own legal & tax professionals.
For questions about the OBBBA Tax Deductions, visit the IRS website.
