Working Families Tax Cuts Put Taxpayers in the Driver’s Seat

Working Families Tax Cuts Put Taxpayers in the Driver's Seat

Washington, D.C.-In addition to preventing the largest tax hike in American history and lowering tax rates across the board, the Working Families Tax Cuts championed by U.S. Senate Finance Committee Chairman Mike Crapo (R-Idaho) are making everyday expenses more affordable. Fulfilling one of President Trump's campaign promises, the law allows working-class taxpayers to deduct interest on loans for new, U.S.-made cars, trucks and motorcycles from their taxes. With this deduction, Republicans are making it easier for Idahoans to get to work, take their children to school or enjoy a drive down one of Idaho's scenic byways.

"This policy is a win-win for Americans: it further boosts domestic manufacturing and helps families meet their expenses," said Crapo. "Combined with permanently lower tax rates and provisions like no tax on tips and overtime, the new deduction for car loan interest helps make low- and middle-income Americans the biggest winners under this bill."

How it works:

• Eligibility: Deduction is available regardless of whether taxpayers itemize or claim the standard deduction.
• • 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 new vehicle,
  • For a personal use vehicle (not for business or commercial use), and
  • Secured by a lien on the vehicle.

• 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.
• • The location of final assembly will be listed on the vehicle information label attached to each vehicle on a dealer's premises.
  • Alternatively, taxpayers can use the Vehicle Identification Number Decoder website from the National Highway Traffic Safety Administration, which provides plant of manufacture information.

Click HERE to learn more about how the Working Families Tax Cuts get Americans on the road.

Click HERE to learn more about the Finance Committee provisions in the Working Families Tax Cuts.