Federal rules for tax years 2025–2028
The deduction follows the VIN, not the badge.
Qualified passenger vehicle loan interest is available only if that vehicle’s final assembly was in the United States, the loan is new to you, and the other statutory tests are met. TaxBreakCheck reads the plant from NHTSA and keeps the IRS caps on the page.
Car loan interest
Up to $10,000. Loan incurred after December 31, 2024. Personal use. GVWR under 14,000 pounds. VIN on the return.
Qualified tips
Up to $25,000, and only in an occupation on the IRS list of jobs that customarily received tips on or before December 31, 2024.
Overtime premium
The FLSA “half,” not the whole time-and-a-half check. Cap of $12,500, or $25,000 on a joint return.
Launch vehicle pages
Launch catalog of high-volume nameplates. Not an official sales ranking and not a list of vehicles that qualify for the deduction. Catalog built from NHTSA vPIC on October 14, 2026. A page answers “does it qualify?” with “decode the VIN.”
Also in the 2025–2028 set
- Trump Accounts — Form 4547, a $1,000 pilot contribution for eligible children born in 2025–2028, and a $5,000 annual limit on other contributions during the growth period.
- Additional senior deduction — $6,000 for each person who is 65 before year-end, reduced by 6 percent of MAGI over $75,000 ($150,000 joint).
- Open verification items — partial-thousand phaseouts, U.S. territories, and anything this site will not guess.
Filing-season reminder
One email when it is time to look at Schedule 1-A. The form is wired for a provider you plug in. Until then it does not send.
Questions
Does a model name qualify for the car loan interest deduction?
No. Section 163(h)(4) requires final assembly in the United States for that vehicle. Treasury said make and model cannot reliably show the plant when the same model is built in more than one place. Decode the VIN.
How large is the car loan interest deduction?
Up to $10,000 of qualified passenger vehicle loan interest for taxable years 2025 through 2028. After that cap, the amount drops by $200 for each $1,000, or part of $1,000, of modified adjusted gross income over $100,000, or over $200,000 on a joint return.
Where do tips and overtime fit?
Qualified tips are capped at $25,000 and qualified overtime premium at $12,500 ($25,000 on a joint return), for 2025 through 2028. Both phase down once modified adjusted gross income is over $150,000, or $300,000 on a joint return. Tips have to be in an occupation on the IRS list.