Made in America Motors Act
The Made in America Motors Act would add a new above-the-line deduction (an adjustment to gross income) for qualified motor vehicle interest. Taxpayers could deduct up to $2,500 of interest paid in a tax year on debt used to acquire a qualified motor vehicle, with several conditions. The debt must be incurred after January 1, 2025, the vehicle must meet specific criteria (be a motor vehicle manufactured in the United States, with final assembly in the U.S., and meeting certain weight and usage rules), and the deduction cannot duplicate any other deduction. The deduction would apply regardless of whether the taxpayer itemizes deductions, and the bill would take effect for taxable years beginning after December 31, 2025. The intent is to encourage the purchase of domestically manufactured vehicles and bolster U.S. motor vehicle manufacturing.
Key Points
- 1Deduction details: Creates an above-the-line deduction for qualified motor vehicle interest, limited to $2,500 per tax year, for interest paid on debt used to acquire a qualified motor vehicle.
- 2Eligibility and self-contained limitation: The deduction applies only to interest on indebtedness incurred after January 1, 2025 and used to acquire a qualified motor vehicle; no deduction allowed for interest on debt that qualifies for another deduction.
- 3Definition of qualified motor vehicle: A vehicle intended for public streets/roads (not a rail vehicle), with at least 4 wheels, a gross vehicle weight rating under 14,000 pounds, manufactured by a defined manufacturer, and with final assembly occurring in the United States.
- 4Final assembly standard: Final assembly means the process by which a vehicle is produced at a plant or other facility, sufficiently complete for delivery to a dealer with all required components for operation, regardless of whether all components are permanently installed.
- 5Tax code changes and effective date: The bill adds the deduction as a new provision (Sec. 224) linked to the overall tax code; it applies to taxable years beginning after December 31, 2025 (i.e., starting in 2026).