I read that interest on a car loan can be deducted if said interest was paid AFTER Dec 224. IS this correct?

sandimelb · ‎March 21, 2026

The correct date is Dev 2024. I purchased my car in 2023. I am paying interest. Can I deduct it as stated in the OBBB?

DoninGA

No. The interest is only deductible if you purchased a new car in 2025.

MaryK4

Based on the One Big Beautiful Bill Act (OBBBA), the car loan interest deduction only applies to loans originated for new vehicles purchased after December 31, 2024. Because you purchased your car in 2023, you cannot deduct the interest paid under this new law, as it does not apply to loans taken out before 2025.

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maglib

@sandimelb I'm sorry. It is only for tax years 2025-2028.The loan must be for a vehicle purchased new and financed after Dec. 31, 2024. Even if you refinanced, it would not be eligible.

This is an "above-the-line" deduction (Reported on Schedule 1A), meaning it reduces your adjusted gross income (AGI) and can be claimed even if you take the standard deduction.

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NCperson

Further, the automobile must have been assembled in the United States. Just because the auto was purchased in 2025 financed doesn't mean it's eligible.

Use the VIN decoder to determine where it was assembled.

https://vpic.nhtsa.dot.gov/decoder/

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I read that interest on a car loan can be deducted if said interest was paid AFTER Dec 224. IS this correct?