§70203 of the One Big Beautiful Bill Act (OB3 Act) added a new deduction for qualified passenger vehicle loan interest (QPVLI) of up to $10,000 per tax year in new §163(h)(4). It does not reduce adjusted gross income (AGI), but it does reduce taxable income (i.e., a below-the-line deduction).
Individuals, decedent estates, and non-grantor trusts may deduct QPVLI. Individuals who are itemizers or non-itemizers claim it on the new Schedule 1-A. It is a temporary deduction available for tax years beginning after December 31, 2024, but it terminates for tax years beginning after December 31, 2028.
Read more: https://www.tomtalkstaxes.com/p/car-interest-deduction (January 2, 2026)