No Tax on Car Loan Interest — 2026 Estimator

The 2026 One Big Beautiful Bill (IRC §163(h)(4)) lets qualifying buyers deduct auto loan interest on new, US-assembled vehicles — up to $10,000 of interest per year. Enter your loan to estimate the deduction and your tax savings.

Loan amount ($)

Annual interest rate — APR (%)

Loan term (years)

Filing status

Marginal federal tax bracket (%)

Modified AGI ($) The deduction phases out above $100k single / $200k joint (assumed; see below).

Eligibility checklist

New vehicleThe vehicle was new (not used) when you bought it. Assembled in the United StatesFinal assembly took place in the US (check the window sticker / VIN origin). Loan originated in 2025 or laterThe deduction applies to qualifying loans taken out after 2024. Personal useThe vehicle is for personal use, not primarily business.

Monthly payment

Est. tax savings — year 1

Est. total tax savings

Year	Interest paid	Deductible (cap $10k/yr)	Est. tax saved

Assumptions & rules used

Maximum deduction: $10,000 of interest per year (per reported 2026 law).
Income phaseout (assumed from 2026 reporting): full deduction at/below $100,000 MAGI single / $200,000 joint, phasing to zero at $150,000 / $250,000.
Amortization uses standard monthly compounding; the loan is assumed to start at the beginning of a tax year.
Tax saved = deductible interest × your marginal bracket — a simplification.

Not tax advice. This is an estimate for illustration only. The 2026 rules are new and details (including phaseout thresholds and qualifying-vehicle lists) should be verified against current IRS guidance or a tax professional before you file.

FAQ

Which vehicles qualify?

New vehicles with final assembly in the United States, bought for personal use with a loan originated after 2024. Check your vehicle's window sticker or the manufacturer's origin information to confirm US assembly.

Is there a limit to the deduction?

Yes — up to $10,000 of auto loan interest per year, subject to income phaseouts.

Do I need to itemize?

Per 2026 reporting, this deduction is available to filers who meet the criteria — but confirm with current IRS guidance, as new provisions often come with filing nuances.