Summary
Around 100 million Americans should check if they qualify for a new tax credit on auto loans created under the One Big, Beautiful Bill Act (OBBA). The credit allows people to potentially deduct up to $10,000 from taxable income if they bought a new car in 2025 that was assembled in the United States. This new deduction aims to provide some tax relief as part of broader tax rule changes in the country.
Key Facts
- The One Big, Beautiful Bill Act creates a tax deduction for auto loans.
- The deduction applies to cars bought in 2025 that were assembled in the U.S.
- To be eligible, taxpayers must earn $150,000 or less ($250,000 for joint filers).
- The credit allows deduction of up to $10,000 in interest from taxable income.
- About 30% of cars sold in 2025 are expected to meet the assembly requirement.
- Tax benefits vary based on income tax brackets, increasing savings for higher brackets.
- The IRS will provide final guidelines for claiming this deduction by February.
