If you are thinking about buying a new car or truck soon, there is a new tax proposal that could actually put some money back in your pocket. U.S. Representative Bill Huizenga from Michigan has introduced the Made in America Motors Act, and here is what it means for you.
What is the Made in America Motors Act and how does it affect you?
This bill would let you deduct up to $2,500 in interest paid on your car loan from your income taxes—but only if the vehicle you buy is assembled in the United States. This idea was first mentioned by former President Donald Trump during a speech in Detroit and is now gaining momentum through this legislation.
Who qualifies for the $2,500 car loan interest deduction?
Not every car or truck buyer will qualify for this deduction. There are some specific requirements that you need to meet:
- The vehicle must be assembled in the U.S.
- The deduction applies to vehicles purchased in 2025 or later
- It must be a light vehicle, weighing less than 14,000 pounds
- You can claim it whether you itemize your taxes or not
- You cannot claim the deduction if your loan already qualifies under another tax break
So, if you are planning to get a personal or light commercial vehicle and want to support American-made products, this might be a great opportunity to also save on taxes.
Why are Republicans pushing this tax break now?
The main reason behind this push is to encourage people to buy vehicles that are made in America, especially with rising costs tied to international tariffs. The U.S. has placed several tariffs on imported cars and parts, and that can drive up prices for everyone.
Huizenga said, “The Made in America Motors Act is a win for American taxpayers, autoworkers and Michigan.” He believes that giving people a tax incentive to buy American-made vehicles will support local jobs and strengthen the economy.
Ford Motor Company also came out in support of the bill, saying that it “will help Americans purchase a car and gain the freedom to move, while supporting American auto workers.”
What types of vehicles are not eligible?
It is important to note what does not qualify for this deduction so you do not get caught off guard:
- Vehicles assembled outside the U.S.
- Any vehicle over 14,000 pounds
- Vehicles already covered by another tax-deductible loan
- Purchases made before 2025
This deduction is meant for personal and light commercial vehicles, so heavy-duty trucks or imported models do not count.
Could this deduction really save you money?
Yes, if you qualify, this tax break could make a difference when tax season rolls around. For example, if you are paying interest on a loan for a U.S.-assembled car, you could deduct up to $2,500 of that interest from your taxable income. That could lower your total tax bill, depending on your income bracket.
But keep in mind—this proposal is still in the legislative stage. So while it looks promising, it has to be passed and signed into law before you can count on it.
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