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Car Loan Interest Deduction: New Tax Relief Rules

New rules allow you to deduct interest paid on loans for passenger vehicles, RVs, and motorcycles, potentially lowering your taxes. This benefit applies to vehicles purchased after December 31, 2024, and has specific dollar and income limits. Lenders will be required to report this information to the tax authorities.
Key points
You can deduct interest on loans for new or used cars, minivans, vans, SUVs, pickup trucks, motorcycles, ATVs, campers, or RVs.
The maximum interest deduction is $10,000 per year.
This tax relief is available for tax years 2024-2028 and applies to loans incurred after December 31, 2024.
The deduction is reduced if your modified adjusted gross income exceeds $100,000 ($200,000 for joint filers).
The vehicle must be manufactured in the U.S., for personal use, and not a fleet, commercial, salvage, or parts vehicle.
This deduction can be claimed whether you itemize deductions or not.
article Official text account_balance Process page
Introduced
Citizen Poll
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Additional Information
Print number: 119_HR_3450
Sponsor: Rep. Kelly, Mike [R-PA-16]
Process start date: 2025-05-15
Lustra uses Artificial Intelligence. Verify details in source documents.
Summarized by: gemini-2.5-flash-preview-05-20
Source data: api.congress.gov
AI work logs for this document launch

OFFICIAL LEGAL TITLE

To amend the Internal Revenue Code of 1986 to provide for special rules allowing taxpayers to deduct qualified passenger vehicle loan interest paid or accrued during the taxable year on certain indebtedness, and for other purposes.

FREQUENTLY ASKED QUESTIONS

What is the official ID of this bill?

The official print number for this legislation is 119_HR_3450.

Which chamber initiated this legislation?

This legislation was initiated in the House of Representatives.

When did the legislative process begin?

The process officially started on 2025-05-15.

What are the main provisions?

Key points include:

  • You can deduct interest on loans for new or used cars, minivans, vans, SUVs, pickup trucks, motorcycles, ATVs, campers, or RVs.
  • The maximum interest deduction is $10,000 per year.
  • This tax relief is available for tax years 2024-2028 and applies to loans incurred after December 31, 2024.
  • The deduction is reduced if your modified adjusted gross income exceeds $100,000 ($200,000 for joint filers).
  • The vehicle must be manufactured in the U.S., for personal use, and not a fleet, commercial, salvage, or parts vehicle.
  • This deduction can be claimed whether you itemize deductions or not.
What is the specific legal status?

The current status is Introduced.

Where can I read the full text of this legislation?

The full official text is available at: View full text

Who is the primary sponsor?

The primary sponsor is Rep. Kelly, Mike [R-PA-16].

What is the latest detailed status?

The latest detailed status is: Referred to the House Committee on Ways and Means.

Is this summary verified?

Yes. This content was analyzed by AI and verified by the Lustra Judge System on 2025-12-22.

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