The IRS will soon issue a final rule to implement a new tax deduction for certain automobile purchases, according to a notice in the Federal Register.
The One Big Beautiful Bill Act passed last year by Congress includes a car loan interest deduction of up to $10,000 annually on qualifying purchases. A final rule to be issued Tuesday implements the deduction, which only applies to a loan on a car, minivan, van, SUV, pick-up truck or motorcycle that has undergone final assembly in the U.S.
The deduction will be effective for interest paid on loans that originated after the end of 2024, and will be phased out for taxpayers with modified adjusted gross income over $100,000, or $200,000 for joint filers, according to the IRS.










