New IRS Reporting Requirements on Qualified Vehicle Loans
As a result of a new IRS rule that took effect in 2025, for tax years 2025 through 2028, individuals may deduct up to $10,000 in interest paid on qualifying auto loans used to purchase new U.S.-assembled vehicles. For tax year 2025, members can locate the interest paid in 2025 on a qualified vehicle on their 12/31/2025 statement.
According to IRS guidance:
- Effective 2025–2028, individuals may deduct interest paid on a loan used to purchase a qualified vehicle for personal use
- Lease payments do NOT qualify
- Maximum annual deduction: $10,000
Which Vehicles Qualify?
To claim the deduction, the vehicle must be:
- Brand new (not used, not leased)
- Assembled in the United States
- Purchased for personal use
- Financed with a loan beginning in 2025 or later
- Eligible vehicle categories include cars, trucks, SUVs, vans, and motorcycles.
You can verify U.S. assembly using these authoritative databases:
NHTSA VIN Decoder: https://vpic.nhtsa.dot.gov/decoder/
DOE Final Assembly Tool: https://afdc.energy.gov/laws/inflation-reduction-act
Consult with a Tax Professional
Tax rules can be complex, especially when it comes to understanding deductions, credits, and reporting requirements. That’s why it’s always a smart idea to consult with a qualified tax professional. They can provide guidance tailored to your unique financial situation, ensure you’re taking advantage of available tax benefits, and help you stay compliant with current IRS regulations. Whether you’re navigating new tax changes or planning ahead, expert advice can give you clarity and confidence.
