The Working Families Tax Cuts, supported by U.S. Senate Finance Committee Chairman Mike Crapo (R-Idaho), will allow taxpayers to deduct interest on loans for new vehicles, according to a March 18 announcement. The law is part of an effort to make everyday expenses more affordable and fulfills a campaign promise from President Trump.
The tax deduction aims to help working-class Americans manage transportation costs while supporting domestic manufacturing. Crapo said, “This policy is a win-win for Americans: it further boosts domestic manufacturing and helps families meet their expenses.” He added, “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.”
The deduction applies regardless of whether taxpayers itemize or claim the standard deduction. The maximum annual deduction is $10,000, with phase-outs beginning at $100,000 in modified adjusted gross income ($200,000 for joint filers). To qualify, the loan must be originated after December 31, 2024; used to purchase a new personal-use vehicle; secured by a lien on the vehicle; and not used for business purposes. Eligible vehicles include cars, minivans, vans, SUVs, pick-up trucks or motorcycles weighing less than 14,000 pounds that have undergone final assembly in the United States. Information about final assembly location can be found on the vehicle information label or through the National Highway Traffic Safety Administration’s Vehicle Identification Number Decoder website.
Crapo serves as chair of the Senate Committee on Finance and has advocated for responsible forest management and natural resource protection according to his official website. He grew up in Idaho Falls and raised five children with his wife Susan according to his official website. Crapo also served three terms in the U.S. House of Representatives representing Idaho’s Second Congressional District according to his official website.
He earned a bachelor’s degree from Brigham Young University and a Juris Doctor from Harvard Law School according to his official website. In addition to his legislative work on tax reform and natural resources protection, Crapo assists Idahoans with federal agencies and service academy nominations according to his official website.
Looking ahead, supporters say these changes are designed to provide ongoing financial relief for working families while encouraging purchases of American-made vehicles.
