Trump's auto loan interest tax deduction plan takes shape

The U.S. Treasury is moving to implement President Trump's "No Tax on American Car Loan Interest" program, allowing eligible taxpayers to deduct up to $10,000 a year in auto loan interest for new vehicles assembled in the United States and purchased between 2025 and 2028. Treasury and the IRS are developing guidelines to clarify eligibility and how the deduction will work.

The U.S. Treasury Department is advancing plans to implement a tax deduction for interest on American auto loans announced under President Donald Trump's administration. Treasury Secretary Scott Bessent has said the program, called "No Tax on American Car Loan Interest," is intended to provide relief to working and middle-class families. The deduction would apply to new vehicles assembled in the United States and bought during a set period. Treasury and the Internal Revenue Service are preparing guidance to explain eligibility and administration. Key details: - The Treasury Department has signaled it is moving forward with implementing the program, according to Secretary Scott Bessent. - The initiative is named "No Tax on American Car Loan Interest." - Eligible taxpayers would be allowed to deduct up to $10,000 per year in auto loan interest. - The benefit applies to new vehicles assembled in the United States and purchased between 2025 and 2028. - Taxpayers can claim the deduction whether they itemize deductions or take the standard deduction, as described in the article. - The Treasury and the IRS are developing guidelines to clarify how the deduction will be applied and who qualifies. Summary: The plan is presented as a way to lower the effective cost of auto loans for eligible buyers and to direct tax benefits toward U.S.-assembled vehicles, which the article notes could support domestic manufacturing and employment. The immediate next step is the publication of Treasury and IRS guidance to define eligibility and implementation details. Undetermined at this time.