WASHINGTON — The Department of the Treasury and the Internal Revenue Service today provided guidance on the “No Tax on Car Loan Interest” provision enacted under the One, Big, Beautiful Bill.
The proposed regulations issued today relate to a new deduction for interest paid on vehicle loans incurred after Dec. 31, 2024, to purchase new made-in-America vehicles for personal use. This new tax benefit applies to both taxpayers who take the standard deduction and those who itemize deductions.
To help taxpayers take advantage of this new tax benefit, today’s guidance addresses important eligibility criteria, including:
The IRS previously announced transition guidance for certain lenders and other taxpayers receiving interest for vehicle loans in 2025. In general, those persons must file information returns with the IRS to report interest received during the tax year and other information related to the loan. These information returns enable taxpayers to claim the benefits of the vehicle loan interest deduction. To help lenders implement these information reporting requirements, the proposed regulations clarify:
Treasury and IRS invite comments from the public on these proposed regulations by Feb. 2, 2026. Comments can be submitted through Regulations.gov and instructions can be found in the proposed regulations.
For more information, see One, Big, Beautiful Bill provisions on IRS.gov.
Last Update: Jan 02, 2026 1:00 pm CST
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