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Calculator2026 filing season2025 returnsSchedule 1-AWhat is MAGI?Is it deductible?No tax on car loan interestEligibilityHow to claimMethodologyPhase-outForm 1098-VLIVIN check2025 standard deductionFAQChangelog

Last reviewed October 31, 2026.

Form 1040

Schedule 1-A and the car loan interest deduction

Direct answer: Report “No Tax on Car Loan Interest” on Schedule 1-A, Part IV: enter each VIN, apply the $10,000 cap and MAGI phase-out, then move the schedule total to Form 1040 (line 13b on a 2025 return).

Schedule 1-A (Form 1040) is where you claim the deduction the IRS calls “no tax on car loan interest.” You use it whether you take the standard deduction or itemize. The 2025 instructions say the schedule is also used for qualified tips, qualified overtime, and the enhanced deduction for seniors. The car-loan piece is Part IV.

Where the total goes on Form 1040

On a 2025 return, Schedule 1-A, line 38, is entered on Form 1040 or Form 1040-SR, line 13b. On Form 1040-NR the same line 38 amount goes to line 13c. Those instructions also say nonresident aliens generally are not eligible for this deduction; the IRS revised the 2025 Form 1040-NR instructions on January 29, 2026, to say so.

The June 16, 2026 draft Schedule 1-A is marked “DRAFT — DO NOT FILE.” On that draft, Part VI, line 44, says to add lines 15, 27, 36, and 43 and enter the total on Form 1040, 1040-SR, or 1040-NR, line 13a. Do not file from the draft. Use it only to see that the car-loan math did not change when the line numbers moved. The IRS had not published a final 2026 Schedule 1-A when this page was updated on October 31, 2026.

Part I is MAGI, and every later part uses it

Part I is the same on the 2025 form and the 2026 draft. Line 1 is Form 1040, 1040-SR, or 1040-NR, line 11b. Line 2a is Puerto Rico income you excluded. Line 2b is Form 2555, line 45. Line 2c is Form 2555, line 50. Line 2d is Form 4563, line 15. Line 2e adds 2a through 2d. Line 3 adds line 1 and line 2e. Line 3 is your MAGI for the car-loan phase-out. If you have none of the add-backs, the 2025 instructions tell you to put line 11b straight on line 3. The MAGI helper follows those lines.

2025 Part IV, lines 22 through 30

Fill out Part IV only if you, or your spouse on a joint return, paid or accrued qualified passenger vehicle loan interest. The form’s own caution says column (iii) is total qualified interest minus column (ii).

LineWhat you enter
22, column (i)The VIN. Two vehicles fit on lines 22a and 22b. More than two VINs go on an attached statement with the same information.
22, column (ii)Qualified interest you deduct somewhere else, including Schedule C, Schedule E, or Schedule F. You cannot deduct the same interest twice.
22, column (iii)Qualified interest for that loan, minus column (ii).
23Add column (iii).
24The smaller of line 23 or $10,000.
25Line 3, your MAGI.
26$100,000, or $200,000 if married filing jointly. No other status gets the higher number.
27Line 25 minus line 26. If zero or less, skip lines 28 and 29 and enter line 24 on line 30.
28Line 27 divided by $1,000. If the result is not a whole number, increase it to the next higher whole number. The form’s examples increase 1.5 to 2, and 0.05 to 1.
29Line 28 multiplied by $200.
30Line 24 minus line 29. If zero or less, enter -0-. This is the qualified passenger vehicle loan interest deduction.

The 2025 instructions also say the deduction requires the VIN on the return, that the loan was originated after December 31, 2024, by you, to purchase an applicable passenger vehicle for personal use, and that the loan is secured by a first lien. Lease payments do not qualify. If a prior qualified loan is refinanced, interest on the refinanced amount can still qualify, limited to the outstanding balance on the refinance date, if the new loan is secured by a first lien on that vehicle.

2026 draft Part IV, lines 28 through 36

The draft created June 16, 2026, keeps Part I on lines 1 through 3. Tips and overtime take more lines than they did in 2025, so the car-loan section starts later. The caution on the draft says certain vehicle loan interest paid in 2026 should be reported on Form 1098-VLI, box 1, and that column (iii) is still total qualified interest minus column (ii).

2026 draft line2025 lineWhat stayed the same
2822VIN, column (ii), and column (iii). The draft adds two yes/no questions: did original use start with you or your spouse, and did final assembly occur in the United States?
2923Add column (iii).
3024Smaller of the total or $10,000.
3125MAGI from line 3.
3226$100,000, or $200,000 if married filing jointly.
3327Subtract. If zero or less, the draft says to enter line 30 on line 36.
3428Divide by $1,000 and round up. The draft repeats the 1.5-to-2 and 0.05-to-1 examples.
3529Multiply by $200.
3630Subtract. Not below zero. This is the deduction.
4438Total of the Schedule 1-A deductions. On the draft, line 44 includes line 36.

The calculator labels its rows with the 2025 lines or the 2026 draft lines, depending on the tax year you pick. For 2027 and 2028 the statute uses the same cap and phase-out, and the IRS had not published those schedules when this page was written.

What to have in hand

The IRS filing checklist for this deduction asks for a lender statement of qualified interest paid in 2025, the VIN and purchase details, and records that the vehicle was new to you, a qualifying type under 14,000 pounds GVWR, and finally assembled in the United States. For 2026 interest, the draft schedule points you to Form 1098-VLI, box 1. Read the Form 1098-VLI guide before you copy a box onto the schedule. Box 1 is not supposed to include interest on the part of the debt that is not a specified passenger vehicle loan.

Estates and trusts do not use Schedule 1-A. The 2025 Form 1040 instructions say a Form 1041 filer should use the “No Tax on Car Loan Interest” worksheet in the Form 1041 instructions.

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