Will the Auto interest Deduction form be fixed? A MAGI of $120,000 is eligible for $6,000 of the car loan interest deduction. The form calculates $0 deduction.

[EpicRivalry]

I would expect the amount I could deduct would decrease from 10000.00 for 2025 to 6000.00 for 2025. with a 120000 MAGI. My interest paid last year was 2044. It should show a deduction of 2044.

[DoninGA]

The auto loan interest deduction is calculated on the new IRS Schedule 1-A

Schedule 1-A in TurboTax is estimated to be available on 01/14/2026.

TurboTax website for forms and schedule availability - https://form-status.app.intuit.com/tax-forms-availability/formsavailability?albRedirect=true&product...

[EpicRivalry]

Schedule 1-A shows as available. This is still not calculating correctly for MAGI of $120000. It says "Congrats! You're saving money on your taxes."  and the Vehile loan interest deduction is $0. A MAGI of $120000 is still eligible for the deduction. It reduces the maximum amount for the deduction by 200.00 for each 1000 over 100000. So instead of 10000, the maximum amount a person could deduct should be 6000.00 

When will this form be fixed? If I am missing any additional information, please let us know.   

[AmeliesUncle]

---

@EpicRivalry wrote:

It reduces the maximum amount for the deduction by 200.00 for each 1000 over 100000. So instead of 10000, the maximum amount a person could deduct should be 6000.00 

---

Yes, it reduces the deduction by $200 for each $1000 over $100,000.

However, did you pay $10,000 or more in loan interest?  It reduces the DEDUCTION, not the maximum cap.  With $120,000 of income, your deduction is lowered by $4,000.  If you paid $4,000 or less of interest, your deduction will be $0.

[EpicRivalry]

I manually completed Schedule 1-A, and no deduction is available. The TurboTax form is confusing. Congrats! you get a deduction of $0 is not useful. Here is everything I found for anyone else who may be confused.  

“No Tax on Car Loan Interest”

• New deduction: Effective for 2025 through 2028, individuals may deduct interest paid on a loan used to purchase a qualified vehicle, provided the vehicle is purchased for personal use and meets other eligibility criteria. (Lease payments do not qualify.)
  • Maximum annual deduction is $10,000.
  • Deduction phases out for taxpayers with modified adjusted gross income over $100,000 ($200,000 for joint filers).
• Qualified interest: To qualify for the deduction, the interest must be paid on a loan that is:
  • originated after December 31, 2024,
  • used to purchase a vehicle, the original use of which starts with the taxpayer (used vehicles do not qualify),
  • for a personal use vehicle (not for business or commercial use) and
  • secured by a lien on the vehicle.

If a qualifying vehicle loan is later refinanced, interest paid on the refinanced amount is generally eligible for the deduction.

• Qualified vehicle: A qualified vehicle is a car, minivan, van, SUV, pick-up truck or motorcycle, with a gross vehicle weight rating of less than 14,000 pounds, and that has undergone final assembly in the United States.
• Final assembly in the United States: The location of final assembly will be listed on the vehicle information label attached to each vehicle on a dealer's premises. Alternatively, taxpayers may rely on the vehicle’s plant of manufacture as reported in the vehicle identification number (VIN) to determine whether a vehicle has undergone final assembly in the United States.
  • The VIN Decoder website for the National Highway Traffic Safety Administration (NHTSA) provides plant of manufacture information. Taxpayers can follow the instructions on that website to determine if the vehicle’s plant of manufacture was located in the United States.
• Taxpayer eligibility: Deduction is available for both itemizing and non-itemizing taxpayers.
  • The taxpayer must include the Vehicle Identification Number (VIN) of the qualified vehicle on the tax return for any year in which the deduction is claimed
• Reporting: Lenders or other recipients of qualified interest must file information returns with the IRS and furnish statements to taxpayers showing the total amount of interest received during the taxable year.
• Guidance: The IRS will provide transition relief for tax year 2025 for interest recipients subject to the new reporting requirements

One, Big, Beautiful Bill Act: Tax deductions for working Americans and seniors | Internal Revenue Se...

Here is a link to the Schedule 1-A form

2025 Schedule 1-A (Form 1040)

[MarilynG1]

If you manually completed Schedule 1-A in TurboTax in FORMS mode in TurboTax Desktop, check the calculations on Schedule 1-A.  Your deduction shows on Line 30 of this form.  

If you're using TurboTax Online, try clearing your Cookies and Cache and step through the interview questions for this section again. 

Here's more detailed info on the Vehicle Loan Interest Deduction.

@EpicRivalry 

[AmeliesUncle]

---

@EpicRivalry wrote:

I manually completed Schedule 1-A, and no deduction is available. The TurboTax form is confusing. Congrats! you get a deduction of $0 is not useful.

---

I agree that some of those TurboTax screens are unhelpful, but they are also sometimes misleading or outright wrong.

At any rate, at first glance it appears it is doing the calculations correctly.