There's a new tax deduction for car loans in Trump's 'big, beautiful bill.' Here's who's eligible-and what's the catch

The "No Tax on Tips" provision in the One Big Beautiful Bill Act introduces a new car loan tax deduction. This deduction applies to interest on loans for qualified passenger vehicles used for personal travel and assembled in the U.S. It is set to expire in 2028 and is available for vehicles purchased in the years 2025 to 2028. The deduction has income limits, capping at $10,000 annually for single filers with adjusted gross income up to $100,000. The deduction decreases with higher income beyond the threshold.

The deduction is available to those with "qualified passenger vehicles" who fall under certain income limits. For single filers with an adjusted gross income up to $100,000, the deductions on vehicle loans are capped at $10,000 in interest each year.

The deduction only applies to interest on loans taken out on "qualified passenger vehicles" used for personal travel, whose "final assembly" took place in the USA.

Read at Fast Company