Vehicle deduction

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I drive a 2022 Subaru Legacy. It has around 30,000 miles on it. I am currently financing, so I have monthly payments. Am I eligible for the tax deduction under the one big beautiful bill?

Ask the Experts - OBBBA - Jan 2026

RogerD1

Alumni - Intuit

So no, your vehicle would not qualify for the car interest loan deduction introduced under the One big Beautiful Bill.

Here are some key factors in determining the car loan interest deduction:

In order to claim the deduction, the following criteria must be met:

The loan originated after December 31, 2024
The vehicle must be a new vehicle for which the taxpayer is the first owner
The vehicle must be for personal use (or a mix of business and personal use, provided personal use is over 50%)
The vehicle must have final assembly in the US. Vehicles manufactured in the US will have Vehicle Identification Number (VIN), with a first digit of 1,4, or 5
Eligible vehicles include cars, minivans, SUVs, pickup trucks or motorcycles with a gross vehicle weight rating (GVWR) of less than 14,000 pounds

The amount of the deduction is capped at $10,000 (or $5,000 for Married Filing Separately) and begins to phase out at incomes above $100,000 (or $200,000 for Married Filing Jointly) and completely phases out for incomes above $150,000 (or $250,000 for Married Filing Jointly)

[Edited 1/15/26, 8:27 AM PST]

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