The IRS has updated its FAQs on the One Big, Beautiful Bill Act’s (OBBBA’s) new deduction for interest paid on auto loans. (FS-2025-03)
The new auto loan interest deduction is available to individual taxpayers for personal use vehicles purchased after December 31, 2024. (OBBBA §70203; IRC §§63(b)(7), 163(h)(4)) The deduction is available for the 2025 through 2028 taxable years only. Among other requirements, the loan must be for the acquisition of a vehicle with a final assembly point in the United States.
The IRS’s updated FAQs provide that taxpayers can rely on either:
- The window sticker of a new vehicle, which must identify the vehicle’s final point of assembly; or
- The vehicle’s plant of manufacture as reported on the vehicle identification number (VIN).
Taxpayers can look up a vehicle’s plant of manufacture using its VIN number at the United States Department of Transportation website:
https://vpic.nhtsa.dot.gov/decoder
The IRS’s updated FAQs are available at:
www.irs.gov/newsroom/one-big-beautiful-bill-act-tax-deductions-for-working-americans-and-seniors
Sign up for Spidell’s 2025/2026 Federal and California Tax Update webinar and get details on OBBBA’s many tax provisions. Click here and register today.
