Barnett KIA | White Bear Lake, MN
New Vehicle Interest Deduction
Qualified buyers may be able to deduct up to $10,000 in eligible auto loan interest on a new KIA based on current federal program guidelines.
- Up to $10,000 interest
- New vehicle purchase
- U.S. final assembly required
- Tax years 2025 to 2028
Not every vehicle or buyer qualifies. Barnett KIA can help you confirm whether a specific vehicle meets the requirements before you buy.
Program overview
- Federal tax deduction tied to eligible auto loan interest
- Applies to qualifying new vehicle purchases
- Subject to income limits and phase-outs
What is the KIA Interest Deduction?
The KIA Interest Deduction is described as a federal tax benefit that may allow qualified buyers to deduct up to $10,000 in eligible interest paid on a new auto loan. The vehicle must meet final assembly requirements in the United States and other program guidelines.
- Deduct up to $10,000 in qualifying auto loan interest.
- Generally applies to new vehicle purchases, not leases.
- Designed to support U.S. manufacturing and reduce ownership costs.
Who may qualify?
You may be eligible if you meet requirements such as:
- Buying a new 2025 model year or newer vehicle
- Financing with a qualified auto loan
- Using the vehicle for personal use
- Meeting income limits and phase-out thresholds
- Purchasing a vehicle with final assembly in the U.S.
Eligible KIA Models
- KIA EV6
- KIA EV9
- KIA Sorento
- KIA Sportage (varies by trim)
- KIA Telluride
How to Claim the Deduction
- Keep your finance paperwork and VIN.
- Track interest paid throughout the year.
- Consult a tax professional when filing your return.
Frequently Asked Questions
What is the program?
It is described as a federal tax deduction related to eligible interest paid on qualifying new vehicles assembled in the United States, subject to income limits and other requirements.
Is there a deadline to qualify for this deduction?
The deduction applies only to eligible interest paid during tax years 2025 through 2028. The auto loan must be new debt contracted after December 31, 2024, and it does not include refinancing of debt that was originally incurred prior to December 31, 2024.
How do I know if my vehicle was assembled in the U.S.?
Final assembly location is typically determined by the vehicle’s VIN and manufacturer documentation. Our team at Barnett KIA can help verify where a specific KIA model was assembled so you can better understand whether it may meet the program’s U.S. assembly requirement before you purchase.
This page is for informational purposes only and is not tax, legal, or accounting advice. Program details, eligibility requirements, income restrictions, and limitations may apply and may change.