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119-hr-3450119th CongressWALLET

To amend the Internal Revenue Code of 1986 to provide for special rules allowing taxpayers to deduct qualified passenger vehicle loan interest paid or accrued during the taxable year on certain indebtedness, and for other purposes.

Sponsored By: Representative Kelly, Mike [R-PA-16]

Introduced

Summary

Creates a temporary rule to make interest on new personal passenger vehicle loans partially deductible as an above-the-line tax deduction for certain buyers. The change would apply to vehicles bought after December 31, 2024, and run through 2028 with income limits and reporting rules.

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Bill Overview

Analyzed Economic Effects

2 provisions identified: 1 benefits, 1 costs, 0 mixed.

Tax break for car loan interest

This bill would let you deduct up to $10,000 per year of interest on a qualifying passenger vehicle loan for tax years 2025 through 2028. The deduction would work even if you do not itemize. Your loan must start after December 31, 2024, be for personal use, and be secured by a first lien. Cars, SUVs, pickups, motorcycles, some ATVs, and certain campers or trailers could qualify if finally assembled in the U.S. No leases, fleet loans, salvage or scrap vehicles, cash‑out loans on old cars, or purely commercial purchases. Your allowed amount would drop by $200 for each $1,000 your modified adjusted gross income is over $100,000 ($200,000 if married filing jointly).

New reporting for car loan interest

Businesses that receive $600 or more in interest from one person in a year would need to file a report with the IRS. The report would list the person's name, address, interest paid, outstanding principal, loan date, and vehicle details. The business would also have to send the borrower a statement by January 31 of the following year. The IRS would set the form and rules. These requirements would apply to loans made after December 31, 2024.

Sponsors & CoSponsors

Sponsor

Kelly, Mike [R-PA-16]

PA • R

Cosponsors

  • Rep. Huizenga, Bill [R-MI-4]

    MI • R

    Sponsored 5/15/2025

Roll Call Votes

No roll call votes available for this bill.

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