$10,000
Max deduction per year
2025 to 2028
Tax years covered
No
Itemizing needed
USA
Final assembly required
If you finance a new vehicle for personal use, the interest you pay on that loan can now come off your federal taxable income, up to $10,000 a year. It was created by the One Big Beautiful Bill Act, signed July 4, 2025, and it covers loans taken out from 2025 through the 2028 tax year. The IRS released its final rules in September 2026.
You don't have to itemize to use it. Whether you take the standard deduction or itemize, the interest can still count. Here's what we get asked most at our store on Kimberly Road.
Quick Check
You may qualify if you're financing a new Mazda CX-50 or Mazda CX-50 Hybrid for personal use.
Call (208) 913-3210Eligibility
1
Used vehicles don't qualify. You have to be the first owner.
2
Final assembly has to happen in the United States.
3
The loan has to be secured by a lien on the vehicle. Lease payments don't count.
4
The loan has to start after December 31, 2024.
5
It has to be bought mainly for personal use, not for your business.
6
Every Mazda SUV and car is well under the gross vehicle weight limit.
Negative equity rolled in from a trade-in doesn't qualify. Refinancing a qualifying loan can still count, up to the balance that was left on the original loan.
Built in Huntsville, Alabama
Check the VIN. Other Mazda models are currently built outside the U.S. and don't qualify, and assembly can vary by vehicle. The window sticker lists the final assembly point, or run the VIN through the NHTSA decoder. Our team is happy to check it with you.
NHTSA VIN DecoderExample
This is a deduction, not a credit. It lowers the income you pay federal tax on, so what you actually save depends on your tax bracket.
Interest you paid this year
$2,500
Amount you can deduct
$2,500
Federal tax saved, 12% bracket
~$300
Federal tax saved, 22% bracket
~$550
For illustration only, assuming income under the limit. Your interest depends on your loan amount, rate and term. Most car loan interest is paid in the early years, so the deduction is usually largest in year one.
Phase-Out
The deduction starts to shrink once your modified adjusted gross income passes the limit. It drops by $200 for every $1,000 over, until it's gone completely.
At Tax Time
1
Keep your loan paperwork. If you pay $600 or more in interest in a year, your lender will send you Form 1098-VLI showing what you paid.
2
Include your VIN. You'll need to report the vehicle's VIN on your tax return.
3
Talk to your tax professional. They can confirm how much you can deduct based on your income and loan.
Your Questions
No. It's a deduction, which lowers your taxable income. A credit comes straight off your tax bill. People mix the two up all the time.
There's no federal tax credit for the Mazda CX-50 Hybrid. It can qualify for the car loan interest deduction, though, as long as you finance it new, it was assembled in the U.S., and you meet the other rules on this page.
No. Lease payments aren't loan interest, so leases don't qualify.
No. The vehicle has to be new to you, and you have to be its first owner.
No. You can take it with the standard deduction too.
This deduction is for vehicles bought mainly for personal use. Business buyers have different write-off rules, like Section 179, and your tax professional can tell you what fits your situation.
It covers the 2025 through 2028 tax years, for loans taken out after December 31, 2024.
Goode Motor Mazda · 2285 Kimberly Rd, Twin Falls
We'll help you find a Mazda CX-50 that fits and check the VIN with you. For tax advice, talk to your tax professional.
(208) 913-3210 Shop Mazda CX-50 InventoryGoode Motor Mazda does not provide tax advice. This page is general information based on the One Big Beautiful Bill Act and IRS final regulations published September 2026 (Federal Register: Car Loan Interest Deduction). Eligibility and savings depend on your situation. Consult a qualified tax professional before making a purchase decision based on tax benefits.
