Explore Tax-Deductible Vehicles at Modern Subaru of Boone
Subaru Vehicles That Qualify
*Available for eligible individuals on new qualifying vehicles assembled in the U.S.
- Only applies to interest paid in tax years 2025-2028 on new debt contracted after 12/31/2024.
- Tax deduction subject to change and filing requirements.
- Income restrictions and other restrictions and limitations may apply.
- Consult your tax, legal, or accounting professional if you have any questions.
- This information does not constitute tax, accounting, or legal advice.
- Deduction subject to federal laws and regulations and manufacturing constraints.
- Applies to all 2025 Subaru Outback, Legacy, and Ascent models, and Crosstrek Sport, Crosstrek Limited and Crosstrek Wilderness.
- Also applies to all 2026 Ascent, and Forester models, and all Crosstrek models except for Hybrid.
Learn more on the IRS Website
No Tax on Car Loan Interest
- New deduction: Effective for 2025 through 2028, individuals may deduct interest paid on a loan used to purchase a qualified vehicle, provided the vehicle is purchased for personal use and meets other eligibility criteria. (Lease payments do not qualify.)
- Maximum annual deduction is $10,000.
- Deduction phases out for taxpayers with modified adjusted gross income over $100,000 ($200,000 for joint filers).
- Qualified interest: To qualify for the deduction, the interest must be paid on a loan that is:
- originated after December 31, 2024,
- used to purchase a vehicle, the original use of which starts with the taxpayer (used vehicles do not qualify),
- for a personal use vehicle (not for business or commercial use) and
- secured by a lien on the vehicle.
If a qualifying vehicle loan is later refinanced, interest paid on the refinanced amount is generally eligible for the deduction.
- Qualified vehicle: A qualified vehicle is a car, minivan, van, SUV, pick-up truck or motorcycle, with a gross vehicle weight rating of less than 14,000 pounds, and that has undergone final assembly in the United States.
- Final assembly in the United States: The location of final assembly will be listed on the vehicle information label attached to each vehicle on a dealer’s premises. Alternatively, taxpayers may rely on the vehicle’s plant of manufacture as reported in the vehicle identification number (VIN) to determine whether a vehicle has undergone final assembly in the United States.
- The VIN Decoder website for the National Highway Traffic Safety Administration (NHTSA) provides plant of manufacture information. Taxpayers can follow the instructions on that website to determine if the vehicle’s plant of manufacture was located in the United States.
- Taxpayer eligibility: Deduction is available for both itemizing and non-itemizing taxpayers.
- The taxpayer must include the Vehicle Identification Number (VIN) of the qualified vehicle on the tax return for any year in which the deduction is claimed.
- Reporting: Lenders or other recipients of qualified interest must file information returns with the IRS and furnish statements to taxpayers showing the total amount of interest received during the taxable year.
- Guidance: The IRS will provide transition relief for tax year 2025 for interest recipients subject to the new reporting requirements.
