How does it work?
Effective for 2025 through 2028, individuals may deduct interest paid on a loan used to purchase a qualified vehicle, provided the vehicle is purchased for personal use and meets other eligibility criteria. (Lease payments do not qualify.)
Customers can deduct up to $10,000 in annual interest per tax return, not per person or per vehicle.
Deduction phases out for taxpayers with modified adjusted gross income over $100,000 ($200,000 for joint filers).