Does Your New Kia Car Qualify for OBBBA Tax Deductions?
At Casey Kia in Newport News, we know shoppers are curious about how the One Big Beautiful Bill Act (OBBBA) may help lower the cost of a new Kia. This guide explains which new Kia vehicles may qualify, how eligibility works, and what you should know before purchasing. Our goal is to make your next visit to Casey Kia as informed and confident as possible.
What is the OBBBA Tax Deduction?
The OBBBA Tax Deduction refers to the One Big Beautiful Bill Act, which was implemented in 2025. It allows consumers to deduct the interest on their new car loans when they file their taxes. The act was designed to aid American vehicle owners, since it can provide significant tax savings. It only applies to vehicles that received their final assembly in the United States, so it also supports American manufacturers by incentivizing car owners to shop for vehicles assembled in the U.S.
How Does the Deduction Work?
Taxpayers can deduct up to $10,000 per year on the interest of their car loan. This benefit only applies to new vehicles and, as we mentioned, their final assembly must have taken place in the United States. The final assembly must have occurred between 2025 and 2028, when this temporary act will expire.
Are There Restrictions?
There are restrictions in place for this act, so not all vehicles will qualify. The car can only be used for personal use, so commercial or fleet vehicles do not apply. The vehicle’s GVWR must be under 14,000 pounds. The act only applies to first liens, and your loan must have originated after December 31, 2024. There’s also an income phaseout for the act, which is completely phased out at $150,000 for individuals and $250,000 for joint returns.
How Do You Claim it?
The One Big Beautiful Bill Act allows taxpayers to claim this deduction for tax years 2025 to 2028. This deduction is considered an above-the-line deduction, so you don’t need to itemize to claim it. Make sure that you include your Vehicle Identification Number (VIN) on your tax return.
Which Kia Cars Qualify?
Over 100 different vehicles qualify for the OBBBA, including many new Kia models. We have an assembly location in West Point, Georgia, so if your model’s final assembly was there, it will qualify. If you’re unsure, you can check your VIN. Vehicles with a VIN that begins with 1, 4, or 5 were assembled in the United States. These models include:
FAQ
Do pre-owned Kia vehicles qualify?
No. The OBBBA incentive applies only to new vehicles, not pre-owned models. Even lightly driven demonstration vehicles are excluded under current guidance.
What does “final assembly in the USA” mean?
It refers to the vehicle’s last manufacturing processes occurring within the United States. This differs from being labeled “made in the USA,” since parts may come from multiple global suppliers.
How do I claim the tax deduction?
In most cases, you’ll claim the OBBBA tax incentive when filing your federal return. Your tax advisor can help you determine whether you meet income and eligibility requirements.
Explore Tax-Smart Options at Casey Kia
If you’re exploring ways to make your next Kia purchase more budget-friendly, your Newport News Kia dealer is here to help. Our team can walk you through eligible models, Kia financing options, and helpful resources. Visit us in Newport News to test‑drive your favorite Kia and get started on your next new‑car journey.
