Beginning in 2025, a new federal provision may allow taxpayers to deduct up to $10,000 per year in interest paid on qualifying auto loans. To help members understand this potential benefit, we’ve outlined the key guidelines below.
Vehicle Requirements
To qualify for the deduction, the vehicle must meet the following guidelines:
-
Be brand new at the time of purchase (used vehicles do not qualify).
-
Be for personal use rather than business or commercial purposes.
-
Be financed with a loan secured by a lien on the vehicle.
-
Have final assembly in the United States (you can confirm this by checking the VIN or using the NHTSA VIN Decoder).
-
Please note: Lease payments are not eligible.
Because AllCom Credit Union primarily finances used vehicles, many members may find that a new vehicle purchase would be required to take advantage of this provision.
Loan Requirements
-
Eligible for loans originated after December 31, 2024, and available through 2028.
-
Interest on refinanced loans may also qualify if the original vehicle and loan meet the guidelines.
Income Eligibility
The deduction begins to phase out at:
-
$100,000 modified adjusted gross income for individual filers
-
$200,000 for joint filers
Who Can Claim the Deduction
Both itemizing and non-itemizing taxpayers may claim this deduction. The vehicle’s VIN must be included on the tax return.
Important Reminder
We strongly recommend consulting a qualified tax professional to determine eligibility based on your personal situation.
If you’re considering a new vehicle purchase and would like to explore financing options, AllCom Credit Union is here to help.
Beginning in 2025, a new federal provision may allow taxpayers to deduct up to $10,000 per year in interest paid on qualifying auto loans. To help members understand this potential benefit, we’ve outlined the key guidelines below.
Vehicle Requirements
To qualify for the deduction, the vehicle must meet the following guidelines:
-
Be brand new at the time of purchase (used vehicles do not qualify).
-
Be for personal use rather than business or commercial purposes.
-
Be financed with a loan secured by a lien on the vehicle.
-
Have final assembly in the United States (you can confirm this by checking the VIN or using the NHTSA VIN Decoder).
-
Please note: Lease payments are not eligible.
Because AllCom Credit Union primarily finances used vehicles, many members may find that a new vehicle purchase would be required to take advantage of this provision.
Loan Requirements
-
Eligible for loans originated after December 31, 2024, and available through 2028.
-
Interest on refinanced loans may also qualify if the original vehicle and loan meet the guidelines.
Income Eligibility
The deduction begins to phase out at:
-
$100,000 modified adjusted gross income for individual filers
-
$200,000 for joint filers
Who Can Claim the Deduction
Both itemizing and non-itemizing taxpayers may claim this deduction. The vehicle’s VIN must be included on the tax return.
Important Reminder
We strongly recommend consulting a qualified tax professional to determine eligibility based on your personal situation.
If you’re considering a new vehicle purchase and would like to explore financing options, AllCom Credit Union is here to help.
