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Car loan interest deduction included in House’s tax legislation draft
A Nissan electric vehicle for sale in Manchester, N.H., in 2023. (AP)
The House's first draft of tax legislation includes a provision sought by President Donald Trump to allow tax deductions for interest on car loans.
The 389-page tax bill, which is a starting point for debate in the tax-writing House Ways and Means Committee, includes the provision, which Trump campaigned on in 2024.
The version in the draft would allow deductions up to $10,000 for each of the tax years 2025, 2026, 2027 and 2028. Purchases of personal passenger vehicles, motorcycles and recreational vehicles would be eligible; leases and purchases of commercial vehicles would not be. The deduction is phased out above incomes of $100,000, or $200,000 for joint returns.
The provision requires that the vehicles be assembled in the United States.
Consideration by Ways and Means is the first of many steps required before this becomes law. But it's enough to rate the promise In the Works.
Our Sources
House Ways and Means Committee, draft tax legislation, May 12, 2025
Politico, "House GOP unleashes sweeping tax legislation," May 12, 2025