M&T Bank Employees Could See Big Benefits from New $10,000 Auto Loan Interest Deduction: Here’s What to Know

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'M&T Bank employees should view the new $10,000 auto loan interest deduction under the One Big Beautiful Bill Act as an opportunity to strategically align major purchases with broader tax planning goals.' – Patrick Ray, a representative of The Retirement Group, a division of Wealth Enhancement.

'M&T Bank employees can use the new $10,000 auto loan interest deduction as a timely incentive to coordinate vehicle financing decisions with their long-term financial planning objectives.' – Michael Corgiat, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article, we will discuss:

1. How the One Big Beautiful Bill Act (OBBBA) creates a new $10,000 auto loan interest deduction for qualifying vehicles.

2. The eligibility rules, income phase-outs, and refinancing criteria for claiming the deduction.

3. Other tax changes in the legislation that may impact M&T Bank employees, including expanded deductions and fresh incentives.

M&T Bank employees financing a car in 2025 or later could benefit from tax savings due to the One Big Beautiful Bill Act (OBBBA). The legislation allows anyone purchasing qualified vehicles between 2025 and 2028 to deduct up to $10,000 in auto loan interest as an above-the-line deduction.

Although the deduction brings meaningful advantages for buyers, not all loans, vehicles, or borrowers will qualify because of strict eligibility requirements.

Key Features of the Auto Loan Interest Deduction

• - Deduction limit for loan interest is $10,000 per year.

• - Vehicle’s final assembly must occur in the United States.

• - Applies to personal-use vehicles under 14,000 pounds—including cars, trucks, SUVs, vans, minivans, and motorcycles.

• - Income phase-outs: Modified Adjusted Gross Income (MAGI) over $200,000 for joint filers or $100,000 for singles.

• - Refinances may be eligible if the original loan met all criteria.

• - Excluded leases: Some commercial vehicles, fleet purchases, salvage vehicles, and auto leases do not qualify.

How Many Vehicles Qualify?

According to American Financial Services Association (AFSA) data, approximately 60% of new vehicles sold in the U.S. in the first half of 2025—roughly 10 million out of 16.3 million—were assembled domestically. ¹  Actual eligibility will vary depending on assembly location and trim levels. Buyers should check the Monroney sticker or U.S.-assembled vehicle databases for verification.

Potential Savings for M&T Bank Employees

While the deduction limit is $10,000, most borrowers are likely to save just a few hundred dollars annually. For instance, with a $41,926 auto loan over 72 months at a 7.2% APR, total interest is about $9,800—or around $1,630 per year. At an 18% marginal tax rate, that equals approximately $290 in yearly tax relief.

Refinancing Rules

According to the IRS, refinanced loans are generally eligible if the original purchase qualified under the program’s requirements. ²

How to Claim the Deduction

For tax year 2025, the IRS will provide detailed instructions. Taxpayers must include their vehicle identification number (VIN) on their return. Lenders are required to file information returns under IRC § 6050AA.

Other Highlights from the Tax Bill

• SALT Deduction Expansion : Raises the cap from $10,000 to $40,000, phasing out between $500,000 and $600,000 MAGI for joint filers.

• Extended Lower Tax Rates : Keeps the doubled standard deduction and reduced brackets beyond 2026.

• Senior Bonus Deduction : Adds $6,000 for individuals (or $12,000 for married couples) for those age 65+ through January 1, 2029.

• Tip and Overtime Deductions : Allows offsets of up to $12,500 (or $25,000 for joint filers) for overtime and up to $25,000 for reported tips.

• Trump Accounts for Children : From 2025–2028, the government contributes $1,000 per newborn; parents may contribute up to $5,000 annually for home-buying, education, or job training.

• Pass-Through Business Benefits : Expands the 20% Qualified Business Income deduction by raising thresholds to broaden eligibility for small business owners.

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Sources:

1. American Financial Services Organization. ' OBBB & Moving Metal .' 10 July 2025.

2. Internal Revenue Service.  One Big Beautiful Bill Act: Tax Deductions for Working Americans and Seniors  (FS-2025-03) . 14 July 2025, updated 25 July 2025. U.S. Department of the Treasury, Internal Revenue Service. 

Other Resources:

1. Taylor, Kelley R. “ New GOP Car Loan Tax Deduction: Which Vehicles and Buyers Qualify .”  Kiplinger , 25 July 2025.

2. Schostag, Keith. “ The One Big Beautiful Bill Act’s Car Loan Interest Deduction .”  America’s Credit Unions , 24 July 2025. 

3. Lautz, Andrew. “ How Does the 2025 Tax Law Change the SALT Deduction? ”  Bipartisan Policy Center , 9 June 2025.

4. Skowronski, Jeanine. “ The ‘Big Beautiful Bill’ Might Include a Tax Break on Your Auto Loan—Here’s How to Find Out if You Qualify .”  Investopedia , 4 Aug. 2025.