# 2025-24154: IRS Floats $10K Car Loan Interest Deduction: Dream or Tax Trap? 2025-24154, Car Loan Interest Deduction, is a Federal Register proposed rule from Treasury Department, Internal Revenue Service published 2026-01-02, effective 2025-01-01; deemed significant under Executive Order 12866 (as of 2026-11-04). - Canonical: https://policyrisk.com/federal-register/2025-24154 - As of: 2026-11-04 - Plain-text twin of the page above; the HTML and this file carry the same facts. ## Facts - Document number: 2025-24154 - Title: Car Loan Interest Deduction - Type: Proposed Rule - Agencies: Treasury Department; Internal Revenue Service - Citation: 91 FR 67 - Published: 2026-01-02 - Effective: 2025-01-01 - Comments close: not stated - Significant: yes (OIRA_API) - Touches household money: no - Regulation identifier numbers: 1545-BR75 - Last updated: 2026-11-04 ## In one line IRS Floats $10K Car Loan Interest Deduction: Dream or Tax Trap? ## Summary Starting soon, some taxpayers can deduct up to $10,000 in interest on car loans for passenger vehicles. If you earn $600 or more in interest from these loans through a business, you’ll need to report it to the IRS, or face penalties. Comments on these new rules are open until February 2, 2026, with a public hearing on February 24, so get ready to weigh in! ## Abstract This document contains proposed regulations regarding the deduction for certain taxpayers for an amount up to $10,000 of qualified passenger vehicle loan interest. This document also contains proposed regulations regarding new information reporting requirements for certain persons who, in a trade or business, receive from any individual interest aggregating $600 or more for any calendar year on a specified passenger vehicle loan, including applicable penalties for failures to file information returns or furnish payee statements as required. The proposed regulations would affect taxpayers that may deduct qualified passenger vehicle loan interest, and also persons subject to these information reporting requirements. This document also provides notice of a public hearing on these proposed regulations. ## Effects PRIA read - Up to $10,000 Car-Loan Interest Deduction: benefit, high. You can deduct up to $10,000 of qualified passenger vehicle loan interest (QPVLI) for eligible vehicles and loans. The deduction applies for indebtedness incurred after December 31, 2024, and to taxable years beginning after December 31, 2024 and before January 1, 2029. - Who May (and May Not) Claim It: mixed, medium. Only individuals, decedents' estates, and non-grantor trusts may deduct QPVLI; business entities generally cannot claim this deduction. The rule clarifies that grantor-trust situations are tested by reference to the deemed owner. - Must Report VIN to Claim Deduction: cost, low. To deduct QPVLI you must report the vehicle identification number (VIN) of the purchased applicable passenger vehicle on Schedule 1-A (or successor) or another form the IRS specifies. VIN is defined by reference to 49 CFR 565.13. - $600 Reporting Rule for Lenders and Sellers: cost, medium. If you are engaged in a trade or business and receive interest totaling $600 or more in a calendar year from an individual on a specified passenger vehicle loan (SPVL), you must file an IRS information return reporting that interest. The return must include the payer's name/address, interest amount… - Penalties for Failing to Report or Furnish Statements: cost, medium. Penalties under sections 6721 (failure to file correct information returns) and 6722 (failure to furnish payee statements) may apply to persons who fail to file the required SPVL information returns or fail to furnish required payee statements. - Electronic Filing Possible for Frequent Filers: cost, low. The IRS may require taxpayers to electronically file information returns (including SPVL returns) if the taxpayer is required to file at least 10 returns of any type during a calendar year, under section 6011(e). - Vehicle and Use Rules That Affect Eligibility: mixed, medium. To qualify, the vehicle must be an Applicable Passenger Vehicle (APV) (original use with taxpayer, manufactured primarily for public roads, 2+ wheels, specific vehicle types, GVWR under 14,000 lbs) and final assembly must have occurred in the United States. The taxpayer must expect the APV will be… - Exceptions: Loans That Don’t Qualify: cost, low. Interest that is paid or accrued on certain loans is not QPVLI and therefore not deductible—this includes loans to finance fleet sales, loans for commercial vehicles not used for personal purposes, lease financing, loans to buy vehicles with salvage titles, and loans to buy vehicles for scrap or pa… - Refinancing and Change-of-Obligor Limits: mixed, low. A refinanced loan counts as an SPVL only to the extent the new loan does not exceed the outstanding balance of the refinanced SPVL at the refinancing date. A change in obligor generally disqualifies the indebtedness as an SPVL, except when the change in obligor occurs by reason of the obligor's dea… - 2025 Transitional Reporting Relief: benefit, low. For calendar year 2025 only, Notice 2025-57 allows an interest recipient to be treated as satisfying the new reporting obligations for SPVL interest if the recipient makes a statement available to the individual showing the total amount of interest received in 2025 on an SPVL. ## Related documents - [2026-20447](https://policyrisk.com/federal-register/2026-20447): Transparency in Coverage, 2026-10-06 - [2026-20277](https://policyrisk.com/federal-register/2026-20277): Federal Scholarship Tax Credit, 2026-10-02 - [2026-20027](https://policyrisk.com/federal-register/2026-20027): Trump Accounts, 2026-09-30 - [2026-20026](https://policyrisk.com/federal-register/2026-20026): Trump Accounts, 2026-09-30 - [2026-18219](https://policyrisk.com/federal-register/2026-18219): Car Loan Interest Deduction, 2026-09-08 - [2026-17622](https://policyrisk.com/federal-register/2026-17622): Federal Independent Dispute Resolution Operations; Correction, 2026-08-28 ## Sources - [2025-24154 on federalregister.gov](https://www.federalregister.gov/documents/2026/01/02/2025-24154/car-loan-interest-deduction) - [2025-24154 as published (PDF)](https://www.govinfo.gov/content/pkg/FR-2026-01-02/pdf/2025-24154.pdf) ## Related - [Previous: 2025-24153, Statutory Updates to Branded Prescription Drug Fee Regulations](https://policyrisk.com/federal-register/2025-24153) - [Next: 2025-24200, Proposed Revisions of the Nonattainment Designation for the 2008 and 2015 Ozone…](https://policyrisk.com/federal-register/2025-24200) - [All Federal Register documents](https://policyrisk.com/federal-register) Source: PRIA, https://policyrisk.com/federal-register/2025-24154 (as of 2026-11-04).