🧾 2026 Car Loan Interest Deduction Calculator
Estimate the potential federal deduction for qualified passenger vehicle loan interest. The provision applies to tax years 2025 through 2028 and has a $10,000 annual cap plus an income-based phaseout.
This single checkbox does not determine tax eligibility. Mixed-use, refinancing, related-party, and mixed-financing rules may require an allocation or make some interest ineligible.
Estimate, not a tax return
Tax savings are approximated as deduction multiplied by your entered marginal rate. Your actual benefit depends on your return and applicable IRS guidance.
Preliminary qualification checklist
This is a screening list, not a complete tax determination. Select the box only after reviewing current IRS instructions and entering the qualified portion of interest rather than automatically using all interest shown by the lender.
- You are the borrower, the original purchase loan originated after December 31, 2024, and the debt is secured by a first lien on the vehicle.
- The vehicle is new and its original use begins with the taxpayer; used vehicles and leases do not qualify.
- Final assembly occurred in the United States, and the vehicle is an eligible car, minivan, van, SUV, pickup truck, or motorcycle with a gross vehicle weight rating below 14,000 pounds.
- Personal use is more than 50%. If there is business or other mixed use, the amount entered has already been limited to the potentially qualified personal-use portion.
- The loan is not owed to a related person. If the financing also covered warranties, protection products, or other items, the amount entered reflects the required allocation.
- If the loan was refinanced, only the eligible portion of interest tied to the outstanding qualified acquisition balance is included; cash-out or excess refinancing is excluded.
- The taxpayer meets identification and return-reporting requirements, including providing the VIN when required.
How the income phaseout works
The maximum otherwise allowable deduction is reduced by $200 for each $1,000, or portion of $1,000, that MAGI exceeds $100,000 for most filers or $200,000 for married couples filing jointly. The deduction cannot go below zero.
Official sources: IRS Topic No. 505 and IRS vehicle-loan interest guidance.