New for 2026 — OBBBA
Car Loan Interest Deduction Calculator
The EV credit expired — but a new federal deduction took its place. Deduct up to $10,000/year of interest on a qualifying new car loan, even if you don't itemize.
✓ Last verified: July 28, 2026 — based on IRC §163(h)(4), One Big Beautiful Bill Act
1. Your Loan Details
2. Vehicle Eligibility
3. Your Income
How This Deduction Works
The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, created a brand-new above-the-line federal deduction for car loan interest — available for tax years 2025 through 2028. Unlike the old EV tax credit, this one isn't limited to electric vehicles; it applies to any qualifying new vehicle, gas or electric.
- Up to $10,000 of loan interest deductible per year
- Vehicle must be new — used vehicles and leases don't qualify
- Vehicle must have final assembly in the United States
- Loan must be secured by the vehicle and originated after Dec 31, 2024
- Personal use only — business, fleet, and commercial vehicles don't qualify
- Phases out between $100k–$150k MAGI (single) or $200k–$300k MAGI (joint)
- Married filing separately does not qualify for this deduction at all
Sources: IRC §163(h)(4), OBBBA (P.L. 119-21), IRS Proposed Regulations REG-113515-25.