topic Can I claim my new car tax? in Deductions & credits

Can I claim my new car tax?

sjmarshall80 — Wed, 04 Feb 2026 00:26:33 GMT

If I bought a new car in 2025 made in USA, can I claim the tax?

Re: Can I claim my new car tax?

MelindaS1 — Wed, 04 Feb 2026 02:22:20 GMT

If you bought a new car in 2025 that was made in the USA, you might qualify for the new vehicle loan interest deduction. Per this article, 'What is the vehicle loan interest deduction?' there are multiple qualifying criteria:

You can deduct the full $10,000 if your income is under $100,000 (or $200,000 if Married Filing Jointly). If your income is higher, the amount you can deduct is less.

The deduction is available even if you don't itemize your deductions.

Do I qualify?

To get the deduction, your vehicle must meet all these rules:

It was purchased, not leased, in 2025.

It’s a brand new vehicle. In other words, you didn’t buy it used.

Its final assembly was in the U.S.

You can check this by entering your VIN and model year into the VIN decoder provided by the National Highway Traffic Safety Administration.

You’ll also include the VIN on your tax return.

It's a car, van, SUV, motorcycle, or pickup truck that weighs less than 14,000 pounds.

You bought it for personal use.

You didn’t pay the interest to a family member or a business you own. The loan must be secured by the vehicle.

Common questions

What if I use the vehicle for personal driving and business?

It’s OK to use the vehicle for your business, as long as:

The loan was a personal loan.

You also use the vehicle for personal driving (it isn’t only for business).

To qualify, you'll have to make sure your vehicle purchase meets all of the above rules i.e.,

the car is brand new and not used or leased,
you use the VIN decoder link to verify the final assembly in the U.S.,
double check the class type and weight is < 14,000 lbs.,
confirm you've used it at least partially for personal rather than business driving,
confirm the vehicle loan interest was not paid to a family member or related business,
ensure the loan is secured by the vehicle,
and verify any further details that are specific to your facts and circumstances,

Then you can claim the deduction.

Re: Can I claim my new car tax?

xmasbaby0 — Wed, 04 Feb 2026 02:33:35 GMT

If you are itemizing deductions you may want to enter sales tax as a major purchase.

SALES TAX

You can enter the sales tax you paid for the car you purchased in 2025 by going to Federal>Deductions and Credits>Estimates and Other Taxes Paid> Sales Tax. You will be asked if you paid sales tax on a major purchase, and you will be able to enter the sales tax you paid for your new vehicle.

Sales tax is an itemized deduction. Unless you have enough other itemized deductions to exceed your standard deduction the sales tax will have no effect on your tax due or refund.

“Major purchases” that you can enter for the sales tax deduction include:

Motor Vehicles (cars, trucks, motor homes, RV’s, sport utility vehicles and off-road vehicles

Aircraft or boats

Mobile homes

Manufactured housing

Building materials for major home improvements

You cannot deduct: furniture, jewelry, home electronics such as TV’s or computers

Re: Can I claim my new car tax?

djhoffpauir — Sun, 22 Feb 2026 22:21:12 GMT

I don't know whether this will have visibility or not, but that sales tax is supposed to be deductible (on a vehicle purchase) but when you enter it Turbo Tax only lists the deduction as 1/100 of the tax. I believe this is a bug since the tax should be 100% deductible. (Though you may end up not using the itemized deduction.)

When I entered my sales tax of $1,156.91, turbo tax said my deduction allowed was $11.57, which is nuts.

It isn't using the actual sales tax amount, but some strange fraction of it.

Re: Can I claim my new car tax?

JamesG1 — Mon, 23 Feb 2026 13:13:05 GMT

Review the entry to make sure that the sales tax was entered correctly.

You can deduct either state and local income taxes or the sales tax you paid during the year—but not both. TurboTax compares them to see which one saves you more.

[Edited 02/23/2026 | 5:12 AM PST]

@djhoffpauir