Washington – The Treasury and IRS today issued guidance on a new tax deduction for car loan interest under the One, Big, Beautiful Bill. The rules allow taxpayers to deduct interest paid on vehicle loans taken after December 31, 2024 for new U.S.‑made cars used personally. The benefit applies to both standard‑deduction and itemized‑deduction filers and is capped at $10,000 per year. The guidance sets eligibility criteria, including that the vehicle’s final assembly occurred in the United States, that the loan is for a new vehicle, and that the vehicle is for personal use. It also details lender reporting requirements and the information that must be filed with the IRS. Comments on the proposed regulations are due by February 2, 2026 via Regulations.gov. For more information, see the One, Big, Beautiful Bill on IRS.gov.
https://www.irs.gov/newsroom/treasury-irs-provide-guidance-on-the-new-deduction-for-car-loan-interest-under-the-one-big-beautiful-bill
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