Vehicle Loan
Interest Deduction
Notification

What is the new vehicle loan interest deduction?
Under H.R.1, passed by the 119^thCongress, individuals can deduct interest paid on a loan used to purchase a qualified new vehicle for personal use. This deduction applies to loans originated after December 31, 2024, and is effective for tax years 2025 through 2028.

What qualifies as a “new vehicle”?
A qualified vehicle must:

• Be a car, minivan, SUV, pickup truck, or motorcycle.
• Have a gross vehicle weight rating under 14,000 pounds.
• Undergo final assembly in the United States.
  • To learn whether your vehicle was assembled in the U.S., visit the National Highway Traffic Safety Administration’s VIN Decoder.
• Be purchased for personal use (not business or commercial).

Do used vehicles qualify?
No. The deduction only applies to new vehicles where the original use begins with the taxpayer.

What is the maximum deduction amount?
Up to $10,000 annually.

Are lease payments eligible?
No. Lease payments do not qualify for this deduction.

What documentation will Members need?
Members must include the Vehicle Identification Number (VIN) on their tax return for any year they claim the deduction. Please consult with your tax advisor for additional information.

What will the credit union provide to Members?
We will provide the amount of interest paid on qualifying loans in your December statement. Please note that this statement contains important tax information that is also being furnished to the IRS. 

Can I deduct the full amount of interest?
You may be unable to deduct the full amount of interest reported on your statement due to applicable limitations based on modified adjusted gross income. You may only deduct the amount actually incurred and paid. Penalties may apply if the deduction is overstated by the payor. Please consult your tax advisor for additional information.