Auto Loan Tax Deduction (2025–2028) – Disclaimers & Vehicle Qualification
Please check with your tax professional for your specific situation. The Kunes Auto Group is providing this information from sources related to the IRS, federal government and other automotive publications. Kunes cannot make claims or guarantees for any individual's tax situation.
General Tax Disclaimers
- IRS will provide transition relief for tax years 2025 to 2028 for taxpayers and employers subject to new
reporting requirements.
- Deduction phases out for single taxpayers with modified adjusted gross income (MAGI) over $150,000 (joint at $250,000).
- Must include the VIN Number on the tax return and provide reporting information to the IRS.
- Must include Social Security Number on tax return and provide reporting information to IRS/SSA.
- Taxpayer must retain records showing eligibility and provide information if requested by IRS.
Vehicle & Loan-Related Disclaimers
- Qualified Vehicle Requirements:
• Must be a car, minivan, SUV, pickup truck, or motorcycle.
• GVWR under 14,000 lbs.
• Final assembly must be in the U.S. and with a VIN starting with a 1, 4, or 5.
• Only applies to new loans originated after December 31, 2024.
• VIN must be reported on tax return.
• Loan must be first lien only (leases HELOC, and second mortgages excluded).
• Personal use only — fleet, commercial, or business vehicles not eligible.
- Related party loans are not eligible.
Deduction Limits & Expiration
- Annual deduction limit: up to $10,000 per year.
- Income phaseouts: deduction reduced $200 per $1,000 of MAGI over $100,000 (single) or $200,000
(joint); fully phased out at $150,000 / $250,000.
- Deduction is temporary — applies only to tax years 2025 through 2028.
IRS & Guidance Disclaimers
- Vehicle eligibility list is subject to change — confirm with latest IRS guidance.
- IRS transition relief applies for employers/payers adjusting to new reporting rules.
Practical Warnings
- Leased vehicles and used vehicles do not qualify.
- Vehicles with salvage titles or purchased for parts are excluded.
- Deduction cannot be used for business/fleet vehicles unless under specific provisions.
- IRS may audit eligibility; retain all VIN and loan documentation.
