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Standard Summary
Comprehensive overview in 1-2 paragraphs
The USA CAR Act amends the Internal Revenue Code to allow a deduction for qualified automobile interest, defining the terms and setting a phased exclusion schedule based on holding period.
Key Points
- 1Amendment to IRC §163(h)(2) to add a new subparagraph for qualified automobile interest.
- 2Definition of qualified automobile interest and qualified automobile, including criteria for acquisition date, final assembly, and securing by the vehicle.
- 3Phased exclusion percentages: 50% for 3‑year holds, 75% for 4‑year holds, 100% for 5‑year or longer holds.
- 4Effective date of the changes is January 1 2025.
- 5Additional conforming amendments to related sections of the IRC.
Impact Areas
Individual taxpayers with car loans or leasesFinancial institutions issuing automobile financingAutomobile manufacturers and dealersTax advisors and accountants
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