Part IV No Tax on Car Loan Interest

You may be able to claim a deduction if you and/or your spouse paid or accrued qualified passenger vehicle loan interest (QPVLI) (see Qualified passenger vehicle loan interest , later) in 2025. You can claim this deduction whether you claim the standard deduction or itemize deductions on Schedule A (Form 1040).

Fill out Schedule 1-A, Part IV, only if you paid or accrued QPVLI in 2025.

VIN required on your return.

In order to take the QPVLI deduction, you must include the vehicle identification number (VIN) of the purchased applicable passenger vehicle (APV) (see Applicable passenger vehicle , later) on your tax return. If you paid QPVLI allocable to multiple APVs, include the VIN of each APV.

If the purchased APV was replaced due to an unforeseen intervening event (for example, a defective APV was replaced under a state lemon law), include the VIN of the substitute APV. For more information, see Proposed Regulations section 1.163-16(c)(3)(ii).

Maximum amount of deduction.

You can’t deduct more than $10,000 of the QPVLI you paid or accrued in 2025.

The amount of the QPVLI deduction (after applying the $10,000 limit) is reduced if your MAGI is greater than the amount shown next to your filing status below.

Married filing jointly—$200,000.

All other filing statuses—$100,000.

Your MAGI is the amount on line 3 in Part I of Schedule 1-A.

Qualified passenger vehicle loan interest.

To qualify for the QPVLI deduction, the interest must be paid or accrued on a loan that generally meets all the following requirements.

Your loan was originated after December 31, 2024.

The loan was originated by you.

The proceeds from your loan were used to purchase an APV (lease payments do not qualify).

Your APV is for personal use (which means you don’t expect it to be used predominantly for business or commercial use. See Personal use , later).

Your loan is secured by a first lien on the purchased APV.