“Big and Beautiful, Invoice” offers interest tax credits on car loans

The Republican signed tax cuts and spending package, which was signed into law last week, was signed into law last week. This advertises tips and tax credits on overtime pay, and includes a tax credit of up to $10,000 on interest paid on car loans for eligible vehicles.

Both to qualify for a temporary income tax credit vehicle And the loan must meet many criteria.

Qualified vehicles include cars, vans, minivans, SUVs, pickup trucks and motorcycles weighing less than 14,000 pounds. You also need at least two wheels and you will need to buy new wheels that are not in use between the beginning of 2025 and the end of 2028. New Law.

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The vehicle must be for personal use only, not for business or commercial purposes, and the “final assembly” of the vehicle must be taken I’ll put it in the US. The final assembly refers to the process in which the main components of a vehicle (engine, transmission, body and chassis) are fully integrated and the vehicle is completed at a US-based manufacturing facility, automotive expert Lauren Fix told FOX Business.

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The bill does not provide a thorough definition of the meaning of “final assembly,” but Consumers can She said that it is likely that the dealer will also be able to confirm the vehicle’s eligibility through documents or certifications provided by the dealer, as it is expected to advertise the vehicle’s qualified vehicle.

“The IRS is expected to create resources listing eligible vehicles and models, as well as existing resources for the Electric Vehicle Tax Credit, to clarify which vehicles meet the final assembly requirements,” Fix added.

Additionally, the vehicle loan must be a standard, protected car loan. A refinance loan may qualify under certain conditions. You must also report the vehicle identification number (VIN) Tax Return To qualify. According to the new law, there is no need to itemize the deduction.

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You can deduct interest on a car loan of up to $10,000, but there is an income cap. For those who file taxes as someone who earns more than $100,000 a year, or for those who file jointly and earn more than $200,000, the deduction is reduced by $200 for every $1,000 per dollar.

Fix said the requirements for the US final assembly could benefit American manufacturing and employment, particularly companies such as Ford, General Motors, Honda, Toyota, BMW and Tesla. However, low-income filers may not benefit from the deduction, Fix said.

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“The exclusion of second-hand cars and imported models can often put a disadvantage to low-income buyers who choose second-hand or affordable imported cars. 80% of cars under $30,000 are imported,” she said.