Mike Kelly (R-PA)
To amend the Internal Revenue Code of 1986 to provide for special rules allowing taxpayers to deduct qualified passenger vehicle loan interest paid or accrued during the taxable year on certain indebtedness, and for other purposes.
A Republican bill with 1 Republican cosponsor · See the cosponsor
Last activity — Referred to the House Committee on Ways and Means.
In committee
Introduced and handed to a committee in the chamber it started in.
The committee holds it, and most bills are never heard from again. A hearing or a committee vote would be news; silence is the usual outcome, and it kills the bill without anyone voting against it.
Its path through Congress
- Introduced
- In Committee
What this bill would do
This bill proposes to amend the Internal Revenue Code to allow taxpayers to deduct interest paid on qualified passenger vehicle loans. This special rule would apply to taxable years beginning after December 31, 2024, and before January 1, 2029. The deduction applies to certain indebtedness for personal use vehicles that are secured by a first lien. The bill includes specific definitions for what constitutes an applicable passenger vehicle and sets various limits on the deduction. It also establishes new reporting requirements for businesses that receive interest on these loans.
Yes· 3 of 9
- Scored +5
Would middle-income households be better off under this?
The bill's primary beneficiaries are middle-income earners due to the income-based phase-out.
- Scored +5
Does this cut taxes for middle-income families?
The bill provides a new tax deduction for passenger vehicle loan interest which benefits middle-income earners.
- Scored +3
Would people in middle age be better off under this?
Middle-aged adults are a primary demographic for vehicle ownership and interest deductions.
The opposite
- Scored -2
Would high-income households be better off under this?
The deduction is phased out for higher income levels, providing no benefit to the very wealthy.
- Scored -1
Does this reduce what the federal government owes?
Providing new tax deductions generally reduces federal revenue.
Who it would affect, and how
Potential Positive Impacts for People
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Tax Deductions for Vehicle Interest: Taxpayers can deduct qualified passenger vehicle loan interest, which may provide financial relief. This deduction is available regardless of whether the taxpayer itemizes their deductions (Section 1, subsection a and b).
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Broad Definition of Vehicles: The deduction can apply to a wide variety of vehicles, including cars, minivans, SUVs, pickup trucks, motorcycles, all-terrain vehicles, and certain trailers or campers (Section 1, subsection a, paragraph D).
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Inclusion of Refinancing: The benefit extends to interest on indebtedness resulting from refinancing a qualifying loan, provided it maintains a first lien and does not exceed the original amount (Section 1, subsection a, paragraph D, clause iii).
Potential Negative Impacts for People
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Dollar Limit on Deduction: There is a cap on the amount of interest a taxpayer can take into account, which cannot exceed $10,000 for any taxable year (Section 1, subsection a, paragraph C, clause i).
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Income-Based Reductions: The deduction amount is reduced for individuals with higher incomes. The deduction is reduced by $200 for every $1,000 (or portion thereof) that a taxpayer's modified adjusted gross income exceeds $100,000, or $200,000 for joint returns (Section 1, subsection a, paragraph C, clause ii).
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Manufacturing Restrictions: The deduction is not available for vehicles where the final assembly did not occur within the United States (Section 1, subsection a, paragraph D).
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Specific Exclusions: Certain types of loans and vehicles do not qualify, such as fleet sales, personal cash loans secured by a vehicle previously owned by the taxpayer, commercial vehicles not for personal use, lease financing, and vehicles with a salvage title or intended for scrap (Section 1, subsection a, paragraph B, clause ii).
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Tap or hover a score for the reason it gave.
- Demographic And Interest Groups
- Would middle-income households be better off under this? — The bill's primary beneficiaries are middle-income earners due to the income-based phase-out. Would people in middle age be better off under this? — Middle-aged adults are a primary demographic for vehicle ownership and interest deductions. Would households on low incomes be better off under this? — Provides a modest tax relief for those purchasing necessary vehicles. Would people in rural areas be better off under this? — Rural residents may rely more on personal vehicles and could benefit from the deduction. Would people in their twenties and thirties be better off under this? — Younger adults often purchase vehicles and could benefit from the interest deduction. Would high-income households be better off under this? — The deduction is phased out for higher income levels, providing no benefit to the very wealthy.
- Economy And Finance
- Does this cut taxes for middle-income families? — The bill provides a new tax deduction for passenger vehicle loan interest which benefits middle-income earners. Is this likely to grow the economy? — Increased consumer purchasing power for vehicles could provide a slight stimulus. Is this likely to create jobs? — The deduction may support the automotive industry by incentivizing vehicle purchases. Does this reduce what the federal government owes? — Providing new tax deductions generally reduces federal revenue.
- Social Issues And Justice
- Is this likely to lift people out of poverty? — The deduction may slightly alleviate financial burdens for those purchasing essential vehicles.
- 5/15/2025
- Referred to the House Committee on Ways and Means.
- 1 Cosponsor added.
- Introduced in House
One bill Congress.gov lists as related to this one — companions in the other chamber, earlier versions, and bills this one absorbed or was folded into.
Bill HuizengaRepublican · Michigan