If you’re driving a car with an internal combustion engine — something that applies to the majority of drivers in the U.S. right now — you’ve probably noticed an uptick in the price of gasoline. (Or, in some cases, more than a mere uptick.) It’s enough to make some drivers consider an EV — even as some U.S. automakers have backed away from manufacturing them. But for drivers looking for a bit of financial relief, there is one reason for encouragement — though it has nothing to do with the current cost of gasoline.
Instead, as NPR’s Camila Domonoske reports, an update to the tax code will enable some car buyers to write off their monthly payments on their taxes this year. There are a few significant caveats here: drivers who purchased a used car will not qualify, and neither will single tax earners with a modified adjusted gross income at or greater than $100,000 for the year. (It’s double that for couples.)
NPR reports that this tax break will apply to new vehicles bought after December 31, 2024 — but only those that were assembled in the United States. (The NHTSA maintains a page where you can check this based on a vehicle’s VIN.) Up to $10,000 in annual interest is deductible, though NPR notes that the specific amount will depend on your tax bracket.
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The automotive industry’s cosplay as Silicon Valley has torpedoed the modern driving experienceThe IRS’s website has a dedicated page explaining this and other changes to the tax code for 2025 and beyond. One more detail that may be of interest to qualifying drivers: this deduction is available to people regardless of whether or not they itemize their taxes for this year. This deduction is also scheduled to remain in effect through 2028.
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