Student Car Loan Interest Deduction Calculator
For working students with both kinds of loans.
The short answer: At the numbers below, the car-side deduction is $1,700 — $204 back at 12% ($8 per paycheck).
New, US-assembled vehicle only
Modified Adjusted Gross Income
Car Loan Interest Deduction
$1,700
✅ 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.
Two Different Loan Deductions
Student loan interest has its own long-standing deduction (up to $2,500). The OBBBA adds car loan interest separately — working students can use both.
- • Car loan interest → OBBBA deduction, cap $10,000
- • Student loan interest → separate deduction, cap $2,500
- • Part-time W-2 wages make the OT/tips deductions potentially relevant too
Worked Example
Single working student, $1,700 of car-loan interest.
- • Deduction $1,700; $204 at a low 12% rate
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Frequently Asked Questions
Can students deduct car loan interest?
Yes if they have a qualified vehicle loan — the OBBBA deduction has no age or student exclusion.
Does it conflict with the student loan interest deduction?
No — they're separate deductions for separate loans.