Frequently Asked Questions
Understand the rules, calculations, and reporting requirements for Section 163 auto interest tax write-offs.
What is the American-Made Vehicle Loan Interest Deduction?
It is a federal tax benefit under Code Section 163 that allows taxpayers to deduct interest paid on auto loans for qualifying, brand new passenger vehicles and motorcycles that were assembled in the United States. You can claim this deduction above-the-line, meaning it does not require you to itemize deductions.
Which vehicles are eligible?
Eligible vehicles must meet three primary criteria: (1) Final assembly must have taken place in the United States. (2) The vehicle must be brand new at purchase. (3) The vehicle must weigh less than 14,000 lbs Gross Vehicle Weight Rating (GVWR) and be categorized as a passenger car, truck, minivan, van, SUV, or motorcycle.
Does it apply to leased cars?
No. Leased vehicles are explicitly excluded. The tax provision requires the vehicle to be purchased and financed with a first-lien secured auto loan.
What are the taxpayer income limits?
The deduction phases out based on your Modified Adjusted Gross Income (MAGI). For single filers, the phaseout occurs between $100,000 and $150,000. For married couples filing jointly, the phaseout occurs between $200,000 and $250,000. Taxpayers with income above these limits do not qualify.
How does the phaseout math work?
The maximum annual deduction is capped at $10,000 of interest paid. If your MAGI exceeds the initial threshold ($100k for single, $200k for joint), the maximum cap is reduced by $200 for every $1,000 of excess income. It reduces linearly to $0 at the upper limit.
Can I claim this for a used or pre-owned vehicle?
No. The deduction is strictly restricted to brand new vehicles purchased for personal use.
How do I check if my car was assembled in the USA?
You can find your 17-character Vehicle Identification Number (VIN) on your dashboard or driver's side door jamb, and run it through our VIN Checker tool on the homepage. Our tool queries the official NHTSA database to check the exact assembly plant location.
Verify a Specific Vehicle
Have a VIN? Put it through our decoder to verify the exact final assembly plant and tax deduction eligibility status instantly.