EV loan interest deduction calculator
The $7,500 EV credit ended on September 30, 2025. Its replacement lets you deduct up to $10,000 a year of car loan interest. The vehicle must be new and assembled in the US, and your income must be below the limits. Check your VIN, run your loan, and see the real dollar saving.
Step 1. Does your vehicle qualify?
Step 2. Your loan
Step 3. Your tax situation
Your result
Enter your loan details and press calculate.
*Meter scale is four years of the $10,000 annual cap at your selected marginal rate.
How this calculator works
The tool builds a standard amortization schedule from your loan amount, APR, term, and start date. It then totals the interest that falls in each calendar year from 2025 to 2028, which is the window Congress set for the deduction. Each year's interest is capped at $10,000. The income phase-out is then applied. You lose $200 of deduction for every $1,000 (or part) of modified AGI above $100,000 for single filers or $200,000 for joint filers. The tax saving is the remaining deduction multiplied by your marginal rate. Interest paid from 2029 onward is not deductible under current law, even if your loan is still running.
The eligibility checklist
All of the following must be true. The calculator checks the assembly question via your VIN; the rest you confirm yourself:
- New vehicle. Original use begins with you. Used vehicles don't qualify.
- Personal use. Not business or commercial use. Leases don't qualify.
- Final assembly in the United States. Verify this on the Monroney window sticker under Final Assembly Point, or with the free NHTSA VIN decoder.
- Loan originated after December 31, 2024. The loan must be secured by a first lien on the vehicle.
- Under 14,000 lbs GVWR. This covers cars, SUVs, pickups, vans, and motorcycles.
Note the deduction is not EV-specific. A US-assembled gas or hybrid vehicle qualifies too. It matters most to EV buyers because it's the main federal incentive left after the purchase credits ended, and EVs' higher prices mean more financed interest.
Reading your VIN
The first character of the 17-character VIN identifies the country of manufacture: 1, 4, 5, and 7 indicate the United States. 2 is Canada, 3 is Mexico, J Japan, K South Korea, L China, S the United Kingdom, W Germany. The ninth character is a check digit this tool validates to catch typos. The VIN prefix is a strong signal but not the legal test. The IRS standard is the final assembly location. Confirm it on the window sticker or the NHTSA decoder before filing. You'll report the VIN itself on Schedule 1-A when you claim the deduction, and your lender sends Form 1098-V showing the interest you paid.
Frequently asked questions
Is the $7,500 federal EV tax credit still available in 2026?
No. The clean vehicle credits ended for vehicles acquired after September 30, 2025. The narrow exception is buyers who signed a binding contract and made a payment by that date but took delivery later. For everyone else, the loan interest deduction is the main federal incentive, alongside state and utility programs.
Do I need to itemize deductions to claim it?
No. It's an above-the-line deduction claimed on Schedule 1-A of Form 1040, so it stacks with the standard deduction.
What are the income limits?
The deduction shrinks by $200 for every $1,000 of modified AGI above $100,000 (single) or $200,000 (married filing jointly), reaching zero at $150,000 / $250,000. The calculator applies this automatically each year.
Does a lease qualify?
No. Leases aren't loans secured by a first lien on the vehicle, so lease payments don't generate deductible interest under this provision.
What about refinancing?
Refinancing an eligible loan can preserve the deduction, but only interest on the portion of the new loan that pays off the original purchase principal counts. Cash-out amounts do not.
Which EVs are assembled in the US?
Examples include most Tesla models (Fremont, CA and Austin, TX), Rivian (Normal, IL), Ford F-150 Lightning (Dearborn, MI), Chevrolet models built in Michigan and Tennessee, VW ID.4 (Chattanooga, TN), and Hyundai models from its Georgia plant. Assembly locations change by model year and trim, so always verify your specific VIN.
Sources: IRS Clean Vehicle Credit guidance and OBBB FAQs (irs.gov); One Big Beautiful Bill Act, §70203 (Qualified Passenger Vehicle Loan Interest); NHTSA VIN decoder (nhtsa.gov). This page is general information, not tax advice. Confirm your position with a tax professional.