The U.S. Treasury Department is moving forward with implementing President Donald Trump’s tax deduction for interest on American car loans, according to U.S. Secretary of the Treasury, Scott Bessent.
The program, called "No Tax on American Car Loan Interest," aims to provide financial relief to working and middle-class families by allowing eligible taxpayers to deduct up to $10,000 per year in auto loan interest. This deduction will be available for new vehicles assembled in the United States and purchased between 2025 and 2028.
A key feature of the plan is that taxpayers can claim this deduction regardless of whether they itemize deductions or take the standard deduction on their tax returns.
The Treasury Department and the Internal Revenue Service are currently developing guidelines to clarify how the deduction will work, ensuring taxpayers understand the eligibility requirements and benefits.
The initiative recognizes that for many Americans, vehicle ownership is a necessity for accessing employment, education, and childcare. By reducing the effective cost of auto loans, the program aims to make car ownership more affordable for families.
The policy also includes provisions to support domestic manufacturing, as the tax benefit applies exclusively to vehicles assembled in the United States, potentially boosting American auto production and employment in the sector.
Source: Investing