Car Loan Interest Deduction

Forum|Forum|6 months ago
January 21, 2026
2 replies
102 views

I purchased a new vehicle in 2025. My bank said that I may qualify for deducting the interest. I have not seen the option to enter this using Turbotax. There is an option for registration fees; however, I live in Oregon and do not qualify for that. Is this an option for Turbotax?

TurboTax Basic Windows

Best answer by Vanessa A

Expert Reviewed

Yes. You can enter your car loan interest by selecting the following:

Deductions and credits
Cars and Other things you own
Start next to Car Loan Interest
You will need to enter the VIN and information from the lender

In order to claim this interest the following criteria must be met:

The car was purchased not leased
Final assembly occurred in the US
It is NOT a business use, but was purchased for personal use
It has a GVWR of less than 14,000lbs (car, truck, SUV, mini van or motorcycle)
Loan was originated in 2025 and must be secured by a lien on the vehicle or the title
Your income must be less than $100,000 if single or $200,000 if married filing jointly to receive the full deduction.
If your income is over $150,000 if single or $250,000 if Married filing jointly, you are not eligible

Note: The interest deduction is capped at $10,000. This is an above the line deduction, not a credit meaning it will lower your AGI and taxable income. It will not be an amount that is refunded to you, but it could result in a refund by lowering your taxable income.

Vanessa AAnswer

Level 15

Expert Reviewed

Yes. You can enter your car loan interest by selecting the following:

Deductions and credits
Cars and Other things you own
Start next to Car Loan Interest
You will need to enter the VIN and information from the lender

In order to claim this interest the following criteria must be met:

The car was purchased not leased
Final assembly occurred in the US
It is NOT a business use, but was purchased for personal use
It has a GVWR of less than 14,000lbs (car, truck, SUV, mini van or motorcycle)
Loan was originated in 2025 and must be secured by a lien on the vehicle or the title
Your income must be less than $100,000 if single or $200,000 if married filing jointly to receive the full deduction.
If your income is over $150,000 if single or $250,000 if Married filing jointly, you are not eligible

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"

jdearm

Level 2

TurboTax is obviously not highlighting this new deduction enough! When you select Standard Deduction, there should then be a list of deduction questions based on that selection that you are still eligible for!

Thanks, Jay D