The 2025 tax law created two new deductions with the same end date: $6,000 for people 65 and over and up to $10,000 a year in car-loan interest, each available for tax years 2025 through 2028 and then gone unless Congress acts. The IRS describes both as deductions from taxable income, open whether or not the filer itemizes. The income limits differ, the eligibility tests differ, and the sunset gives each one only four tax years.
The senior deduction at a given income: The IRS publishes the thresholds, and each filer’s own income sets the result. The Retirement Tax & Withdrawal Planner covers the senior deduction and a provisional income calculator.
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Four tax years, then the provisions end
The IRS’s summary of the 2025 law’s deductions, last updated July 25, 2025, lists tax years 2025 through 2028 for each of the four new deductions, and the agency’s senior deduction explainer of February 27, 2026 says it is “effective 2025 through 2028.” Nothing on the pages read for this article extends either deduction past the 2028 return, so a return for tax year 2029 would carry neither unless the law changes.
The dollar amounts are ceilings on the deduction, not payments. A deduction lowers taxable income, so its value to a filer is the amount deducted times that filer’s tax rate.
The senior deduction: age 65 by year-end, per person
The senior deduction is $6,000 per eligible individual, which the IRS puts at $12,000 in total for a married couple when both spouses qualify. The age test is that the individual reaches 65 on or before the last day of the tax year, so a person who turns 65 on December 31 meets it for that year. A valid Social Security number must be on the return, and married taxpayers must file jointly.
The IRS states that the deduction is “in addition to the current additional standard deduction for seniors under existing law.” The two are separate. The additional standard deduction for age 65 or older is an older, smaller amount, which the IRS’s Topic 551 gives as $1,600 for married filers and $2,000 for unmarried filers for tax year 2025. The new $6,000 is a different deduction, and the two stack.
The car-loan interest deduction: a new, US-assembled vehicle bought for personal use
The car-loan deduction is capped at $10,000 of interest a year. The loan must have originated after December 31, 2024, and be secured by a lien on the vehicle. The vehicle must be new, meaning its original use starts with the taxpayer, so used vehicles are out, and it must be a car, minivan, van, sport utility vehicle, pickup truck or motorcycle with a gross vehicle weight rating under 14,000 pounds. Final assembly must take place in the United States, which the IRS says can be checked from the vehicle information label or the vehicle identification number, using the National Highway Traffic Safety Administration’s VIN decoder.
The final regulations, published September 8, 2026 and effective November 9, 2026, add detail. The use must be personal, determined at loan origination, with the taxpayer expecting more than 50 percent personal use by the taxpayer, a spouse or related individuals. Leased vehicles do not qualify because original use starts with the lessor. A refinanced loan qualifies only up to the original loan’s outstanding balance, and lenders report loans with more than $600 in annual interest on Form 1098-VLI. The vehicle identification number must appear on the return for each year claimed.
Phase-outs at $75,000 and $100,000 of modified adjusted gross income
Each deduction fades out at its own income level, according to the same IRS summary. The senior deduction begins to phase out when modified adjusted gross income exceeds $75,000, or $150,000 for joint filers. The car-loan deduction begins to phase out above $100,000, or $200,000 for joint filers. Modified adjusted gross income of $90,000 for a single filer is therefore past the senior threshold and under the car-loan one, and the IRS pages read for this article do not set out the phase-out rate, so the reduced amount cannot be computed from them.
Income limits and vehicle tests that decide whether either deduction reaches a return
The friction is specific. Two thresholds apply to two different deductions, so joint modified adjusted gross income of $160,000 sits above the senior threshold of $150,000 and below the car-loan threshold of $200,000. The senior deduction also depends on each spouse’s age, since the $12,000 total requires both to be 65 or older by year-end, and it sits beside, rather than replaces, the additional standard deduction the same filers may already take.
The car-loan deduction asks for facts that live in loan and dealer paperwork: whether the loan originated after December 31, 2024, where final assembly occurred, whether the vehicle was new at purchase, and whether personal use is expected to exceed 50 percent. Refinancing and leasing change the answer. Modified adjusted gross income, the measure behind both phase-outs, is a figure each filer has to build from their own return.
Claiming either deduction is free. It is entered on Schedule 1-A, which the IRS publishes with the Form 1040 instructions, and no paid preparer is required to do it.
Where the senior deduction meets a retiree’s own income
The IRS gives the age test and the income thresholds for the senior deduction, but the gap is in applying them: a filer’s own modified adjusted gross income decides whether the deduction applies in full, in part or not at all, and the deduction ends after tax year 2028.
The Retirement Tax & Withdrawal Planner includes the senior deduction and a provisional income calculator.
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AI assistance went into drafting this article; the IRS and Federal Register pages it cites were re-read before publication to confirm each deduction figure, date and test.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
