Auto Loan Interest Deduction Calculator
Eligibility checklist (all three required)
Only interest paid on the loan qualifies — not principal, and not a lease payment (leases don't qualify at all). The vehicle must be new (not used), assembled in the US, for personal use, and the loan must have originated after December 31, 2024; the VIN must be reported on your return. This above-the-line federal deduction runs for tax years 2025–2028 under the OBBBA, capped at $10,000/year regardless of filing status, and phases out $200 for every $1,000 of MAGI above $100,000 single / $200,000 joint — reaching $0 at $150,000 single / $250,000 joint. Estimate only, not tax advice — confirm with a tax professional or the IRS.
Free Auto Loan Interest Deduction calculator for the OBBBA 2025-2028 federal deduction — checks new/US-assembled/loan-date eligibility, shows your MAGI phase-out, and estimated federal tax savings.
How it works
- Confirm the three eligibility requirements: new vehicle, US final assembly, loan originated after 2024-12-31
- Enter your filing status, annual auto loan interest paid, and household MAGI
- See your federal deduction (up to $10,000), how the MAGI phase-out reduced your cap, and estimated federal tax savings
Frequently asked questions
Does the deduction cover my whole car payment?
No — only the interest portion of your loan payments qualifies, not principal. Lease payments don't qualify at all; only a purchase loan does.
What counts as "assembled in the United States"?
Final assembly of the vehicle must have taken place in the US, regardless of the manufacturer's home country — some models from foreign automakers qualify if they're built at a US plant, while some US-brand models built abroad don't. Check the vehicle's window sticker or VIN for the assembly location.
Can I deduct interest on a used car loan?
No. The vehicle must be new — a used-vehicle purchase loan doesn't qualify for this deduction, even if it otherwise meets the assembly and date requirements.
Do I need to itemize deductions to claim this?
No — like the tips and overtime deductions, this is an above-the-line deduction available whether you itemize or take the standard deduction.
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Update history
- 2026-09-22 Launched: Auto Loan Interest Deduction calculator with an eligibility checklist (new/US-assembled/loan date), MAGI phase-out ($200 reduction per $1,000 over $100,000 single / $200,000 joint), and estimated federal tax savings. Entirely client-side.