Facts
Car-loan interest fact cards
Printable-looking cards drawn from the IRS Working Families Tax Cuts pages. Open a card for citations, filer notes, and the free VIN checker. Not a determination that any loan is deductible.
Cap
$10,000 of interest / year
The IRS Working Families Tax Cuts pages state the maximum annual deduction is $10,000.
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Years
Tax years 2025–2028
The IRS describes the deduction as effective for 2025 through 2028.
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MAGI
Phaseout starts $100k / $200k
The IRS says the deduction phases out for MAGI over $100,000 ($200,000 joint).
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Lease
Lease payments do not qualify
Quoted from the IRS Working Families Tax Cuts pages. A lease forfeits this interest deduction.
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Used
Used vehicles do not qualify
The IRS requires that original use of the vehicle starts with the taxpayer. VIN model year is a signal, not proof of first owner. Older years usually fail that gate even when the plant is in the United States.
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Price
No IRS purchase-price / MSRP cap
The statute does not gate the deduction on vehicle price. The interest cap is $10,000 a year plus MAGI phaseout.
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Assembly
US final assembly required
The vehicle’s final assembly must occur in the United States. AssemblyAlert’s VIN check reads NHTSA plant-of-manufacture data — not a tax determination.
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Vehicle type
GVWR under 14,000 pounds
IRS Topic 505 and the 2026 Code limit a qualified passenger vehicle to a GVWR of less than 14,000 pounds. That is a manufacturer rating — not curb weight.
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Reporting
VIN on the return
IRS materials for Schedule 1-A say you report the vehicle identification number with the qualified passenger vehicle loan interest claim.
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Reporting
1098-VLI lender statement
Lenders must furnish interest statements. Many filers should watch for Form 1098-VLI around January 2027. The form is an information statement — not a determination that you qualify.
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MAGI phaseout start (illustration)
IRS fact: phaseout starts for MAGI over $100,000 ($200,000 joint). The slope is an OBBBA-statute illustration, not a prepared return. MAGI phaseout explainer.
Interest vs the IRS cap
Illustration only. Use the interest estimator, the $10,000 cap page, and the VIN checker.
Not tax advice. Not affiliated with the IRS or NHTSA. Owned by Record of Sale, LLC. Cite the IRS Working Families Tax Cuts pages. This site never says a loan is deductible. VIN checker.