Auto Loan Interest Deduction

Deductible Amount

Eligible taxpayers may deduct up to $10,000 in annual interest paid or accrued on loans for qualifying new personaluse vehicles effective for 2025 through 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, and December 31, 2028.

Qualifiers

To qualify for the deduction, the interest must be paid or accrued on a loan that is: 1. originated after December 31, 2024 2. used to purchase a vehicle, the original use of which starts with the taxpayer (used vehicles do not qualify) 3. for a personal use vehicle (not for business or commercial use) and 4. 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 and and have a gross vehicle weight rating (GVWR) of less than 14,000 pounds. See the following page for a list of qualifying vehicles.

Customer Eligibility

Deduction begins to phase out for taxpayers with modified adjusted gross income over $100,000 ($200,000 for joint filers). Eligible customers can include the deduction on their Tax Return.