Taxtime LLP

New Deduction: "No Tax on Car Loan Interest”

Effective for 2025 through 2028, individuals may deduct interest paid on a loan used to purchase a qualified vehicle, provided the vehicle is purchased for personal use and meets other eligibility criteria. (Lease payments do not qualify.)
▪️Maximum annual deduction is $10,000.
▪️Deduction phases out for taxpayers with modified adjusted gross income over $100,000 ($200,000 for joint filers).

Qualified interest: To qualify for the deduction, the interest must be paid on a loan that is:

📍 Purchase originated after December 31, 2024,

📌 Loan used to purchase a vehicle, the original use of which starts with the taxpayer (used vehicles do not qualify),

▪️ It is for a personal use vehicle (not for business or commercial use) and secured by a lien on the vehicle.

If a qualifying vehicle loan is later refinanced, interest paid on the refinanced amount is generally eligible for the deduction

**Qualified vehicle: A qualified vehicle is a car, minivan, van, SUV, pick-up truck or motorcycle, with a gross vehicle weight rating of less than 14,000 pounds, and that has undergone final assembly in the United States.

Send a message to learn more

The Parental Choice Tax Credit application is available Jan. 15 at 12:01 a.m mountain time. Log into TAP and click Parental Choice Tax Credit Dashboard on the Individual Income Tax panel.

If you have not created an account you can do so here: https://idahotap.gentax.com/TAP/_/ #4

A Parental Choice Tax Credit (PCTC) is:
a state-sponsored program, offering refundable tax credits to families for private education expenses like tuition, fees, tutoring, materials, and tests for K-12 students, functioning as a form of school choice to help offset costs for nonpublic education. It provides up to $5,000 per student (more for disabilities), helping families use tax money for diverse learning settings like private schools, microschools, or learning pods.

How it Works:
Qualifying Expenses: Covers private school tuition, fees, tutoring, textbooks, curriculum, standardized test fees, and transportation to educational facilities.
Credit Amount: Up to $5,000 per student, or $7,500 for students with disabilities.
Refundable: If the credit exceeds the tax owed, the family receives the difference as a refund, providing direct financial relief.
Application: Families must apply through their state's tax portal (like Idaho's My School Choice) during specific windows (e.g., January 15-March 15 in Idaho).
Income Limits: Eligibility often includes income caps, such as 300% of the federal poverty level in Idaho.

Key Features

School Choice: Supports families choosing options outside traditional public schools, including private schools, homeschooling (via materials), microschools, and learning pods.

Idaho TAP