IRS Proposes Rules to Implement Auto Loan Interest Tax Break (1)

The IRS proposed rules on the car loan interest tax deduction from the GOP’s tax-and-spending law on Wednesday.

The rules (RIN: 1545-BR75) further implement the newly created tax break from the multitrillion-dollar law that President Donald Trump signed in July. Republicans are hoping many of the tax breaks for individuals will put cash in voters pockets as they grapple with the cost of living ahead of the midterm elections.

The law allows certain taxpayers to deduct up to $10,000 in car loan interest on their tax return for new vehicles purchased between 2025 and 2028. It ...