Military Car Loan Interest Deduction Calculator
For active-duty buyers (and the SCRA angle).
The short answer: At the numbers below, the deduction is $2,500 — $250 back at 10% ($10 per paycheck).
New, US-assembled vehicle only
Modified Adjusted Gross Income
Car Loan Interest Deduction
$2,500
✅ You qualify for the full deduction
⚠️ This calculator provides estimates for informational and educational purposes only. It is not tax advice. Results are based on the One Big Beautiful Bill Act (OBBBA) and IRS Schedule 1-A. Consult a qualified tax professional for your specific situation.
OBBBA Deduction + SCRA Cap
Service members get the OBBBA interest deduction like anyone — with the bonus that SCRA caps pre-service loan interest at 6% (less interest, but protected).
- • Post-enlistment loans: interest deducts to $10,000
- • Pre-service loans capped at 6% by SCRA — interest that remains still deducts
- • BAH and allowances affect MAGI phase-out math
Worked Example
MFJ junior enlisted, $2,500 of interest.
- • Deduction $2,500; $250 at 10%
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Frequently Asked Questions
Can service members deduct car loan interest?
Yes — the OBBBA deduction applies to military W-2 filers like everyone else.
Does SCRA-capped interest still deduct?
Yes — whatever interest you actually pay on the qualified loan is what the deduction uses.