Federal Tax Deduction for American Motorcycle Buyers
If you've been dreaming of riding home on a brand-new Harley-Davidson®, now is the time to do it! Thanks to a new federal law, qualified riders can now deduct up to $10,000 per year in interest on loans used to finance a new, U.S.-assembled motorcycle.
This first-of-its-kind tax benefit is a major win for American motorcycle buyers and new, U.S.-assembled Harley-Davidson motorcycles qualify.
A. Under the new law, up to $10,000 per year of interest paid on motorcycle loans for new motorcycle purchases is tax-deductible provided all vehicle and customer eligibility requirements are met.
Q. Is the tax deduction a direct rebate at time of purchase?
A. No. Eligible customers must claim the deduction to reduce their taxable income when they file their tax return.
Q. What is the timing for the tax deduction?
A. The tax deduction is available for new vehicles financed on or after January 1, 2025, through December 31, 2028 and covers tax years 2025, 2026, 2027, and 2028. The interest must be from a new loan contracted on or after January 1, 2025.
Q. What are the customer income caps for eligibility?
A. The financial benefit begins to phase out for taxpayers once their modified adjusted gross income exceeds $100,000 for individuals and $200,000 for married couples filing a joint return.
Q. Is the tax deduction available for tax filers taking the standard deduction?
A. Yes. The tax deduction applies whether an individual itemizes deductions or takes the standard deduction.
Q. Are deductions available for business or commercial entities?
A. No. Eligible purchases are limited to personal use vehicles.
Q. Is there a maximum deduction?
A. Yes. The total annual deduction is capped at $10,000 in qualifying interest payments.
Q. Do pre-owned vehicles qualify?
A. No.
Q. How will customers know how much interest was paid on the loan?
A. Customers should keep detailed records of the loan, including the amount of qualified interest paid during a given tax year.
Q. Which Harley-Davidson models qualify for the tax deduction?
A. New vehicles with a VIN beginning with 1HD and financed in 2025 would be eligible. Revolution Max vehicles from 2025 forward, which have VINs starting with MLY, would not be eligible.
Q. Is eligibility based on the model year of the new motorcycle or the year in which it was sold?
A. Eligibility is based on the year the loan was originated.
Q. How can I confirm for the customer that the motorcycle is in fact assembled in the United States?
A. Locate the VIN on the title, registration, or motorcycle frame. If the VIN begins with 1HD the vehicle was assembled in the United States.
This content is for informational purposes only and does not constitute tax, legal, or financial advice. Please consult a certified tax professional or financial advisor to determine how this tax deduction may apply to your personal situation.
This first-of-its-kind tax benefit is a major win for American motorcycle buyers and new, U.S.-assembled Harley-Davidson motorcycles qualify.
Which Harley-Davidson Models Qualify?
To qualify, the new Harley-Davidson motorcycle must have a Vehicle Identification Number (VIN) that starts with 1HD. Revolution Max models (VINs beginning with MLY) are not eligible. Qualifying model families include:
- Softail Models: Street Bob, Low Rider S, Low Rider ST, Breakout, Fat Boy, Heritage Classic
- Touring Models: Road King Special, Street Glide, Street Glide Ultra, Road Glide, CVO Road Glide, CVO Street Glide, CVO Road Glide ST
- Trike Models: Road Glide 3, Freewheeler, Tri Glide Ultra
Tax Deduction Details
- Deduct up to $10,000 per year in interest paid on qualiying motorcycle loans
- Applies to new, U.S.-assembled motorcycles only
- Available to both itemized and standard deduction filers
- Valid for loans originated between January 1, 2025 and December 31, 2028
- Personal-use vehicles only (not applicable to business or commercial entities)
- For individuals, the deduction phases out starting at $100,000 in Modified Adjusted Gross Income (MAGI) and ends at $150,000
- For married couples filing jointly, the phase-out begins at $200,000 and ends at $250,000
Customer Process Overview
- Visit Paradise Harley-Davidson.
- Select a new Harley-Davidson motorcycle with a VIN that begins with 1HD.
- Secure financing for the motorcycle.
- Keep detailed records of the loan and interest paid.
- When it’s time to file your taxes, deduct the eligible interest you paid on your motorcycle loan (up to $10,000).
- Consult with your tax professional to maximize this financial benefit.
Frequently Asked Questions (FAQ)
Q. What is the New Vehicle Loan Interest Tax Deduction?A. Under the new law, up to $10,000 per year of interest paid on motorcycle loans for new motorcycle purchases is tax-deductible provided all vehicle and customer eligibility requirements are met.
Q. Is the tax deduction a direct rebate at time of purchase?
A. No. Eligible customers must claim the deduction to reduce their taxable income when they file their tax return.
Q. What is the timing for the tax deduction?
A. The tax deduction is available for new vehicles financed on or after January 1, 2025, through December 31, 2028 and covers tax years 2025, 2026, 2027, and 2028. The interest must be from a new loan contracted on or after January 1, 2025.
Q. What are the customer income caps for eligibility?
A. The financial benefit begins to phase out for taxpayers once their modified adjusted gross income exceeds $100,000 for individuals and $200,000 for married couples filing a joint return.
Q. Is the tax deduction available for tax filers taking the standard deduction?
A. Yes. The tax deduction applies whether an individual itemizes deductions or takes the standard deduction.
Q. Are deductions available for business or commercial entities?
A. No. Eligible purchases are limited to personal use vehicles.
Q. Is there a maximum deduction?
A. Yes. The total annual deduction is capped at $10,000 in qualifying interest payments.
Q. Do pre-owned vehicles qualify?
A. No.
Q. How will customers know how much interest was paid on the loan?
A. Customers should keep detailed records of the loan, including the amount of qualified interest paid during a given tax year.
Q. Which Harley-Davidson models qualify for the tax deduction?
A. New vehicles with a VIN beginning with 1HD and financed in 2025 would be eligible. Revolution Max vehicles from 2025 forward, which have VINs starting with MLY, would not be eligible.
Q. Is eligibility based on the model year of the new motorcycle or the year in which it was sold?
A. Eligibility is based on the year the loan was originated.
Q. How can I confirm for the customer that the motorcycle is in fact assembled in the United States?
A. Locate the VIN on the title, registration, or motorcycle frame. If the VIN begins with 1HD the vehicle was assembled in the United States.
This content is for informational purposes only and does not constitute tax, legal, or financial advice. Please consult a certified tax professional or financial advisor to determine how this tax deduction may apply to your personal situation.