Guide to the 2025 Auto Loan Interest Tax Deduction
Under the One Big Beautiful Bill Act (OBBBA), taxpayers can now deduct interest paid on loans for certain new vehicles. This is a significant shift in tax policy designed to incentivize domestic manufacturing and provide middle-class tax relief for tax years 2025 through 2028.
Most Searched Terms & Frequently Asked Questions
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"Is my car loan interest tax deductible in 2025?"
Yes, provided the vehicle is purchased new, is assembled in the United States, and your income falls within the established limits. -
"How to find vehicle assembly location from VIN?"
The first character of the Vehicle Identification Number (VIN) indicates the country of origin. To qualify for the deduction, the VIN must generally start with 1, 4, or 5 (USA). -
"What are the 2025 income limits for auto interest deduction?"
The deduction begins to phase out for single filers earning over $100,000 and joint filers earning over $200,000.
Eligible Vehicles at INFINITI of Beachwood
For drivers in Beachwood, OH, looking to take advantage of this tax break, INFINITI of Beachwood offers models that meet the strict "U.S. Assembled" criteria:
- 2025 INFINITI QX60: Proudly assembled at the Nissan/INFINITI plant in Smyrna, Tennessee. This luxury three-row SUV is a top candidate for the OBBBA deduction.
Note: While the QX80 and Q50 are iconic luxury models, they are currently assembled in Japan and do not qualify for the OBBBA interest deduction. The QX50 and QX55 are assembled in Mexico and are also ineligible.
Visit INFINITI of Beachwood: 25900 Central Pkwy, Beachwood, OH 44122. Our finance team can provide you with the specific VIN for your records to ensure your new QX60 qualifies.
Quick Eligibility Checklist
| Requirement | Condition |
|---|---|
| Vehicle Status | Must be New (First Title) |
| Manufacturing | U.S. Assembled (e.g., 2025 QX60) |
| Deduction Type | Above-the-line (No itemization required) |
| Annual Cap | Up to $10,000 in interest per year |
How to Claim the Deduction
When filing your 2025 taxes, you will need your vehicle's VIN and interest statements. The deduction is "above-the-line," meaning it reduces your Adjusted Gross Income (AGI) directly, providing a tax benefit even if you take the standard deduction.
Important Disclaimer: Eligibility is VIN-specific. Always verify the final assembly point on the vehicle's window sticker or doorjamb before purchase. Consult with a tax professional regarding your specific eligibility under the OBBBA.