If you bought a new car last year, you could qualify for this tax break. Here's what to know.

February 11, 2026

TL;DR

A new tax deduction allows the deduction of interest paid on auto loans for new cars.
The deduction is available for new vehicles purchased between January 1, 2025, and December 31, 2028, and expires after 2028.
Eligible vehicles must have undergone final assembly in the U.S.
There are income limitations for claiming the full deduction: up to $100,000 modified adjusted gross income (MAGI) for single filers and $200,000 for married couples filing jointly.
The maximum deduction is $10,000 per federal tax return.
Taxpayers can use their Vehicle Identification Number (VIN) to check if their car qualifies.
The deduction is available to those who take the standard deduction or itemize.
Taxpayers need to gather auto loan statements and fill out Schedule 1-A when filing their taxes.

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