Additional Coverage:
- Nearly 100 million households may get extra $1,000 in tax refunds — see if you qualify (marketrealist.com)
Your Tax Refund Could Get a $1,000 Boost – Are You Eligible?
Good news for your wallet! With prices continuing to put a squeeze on household budgets, many Americans are looking for any extra cash they can get. And while the talk of a $2,000 payout from the Trump administration continues, there’s another significant opportunity for a financial boost right around the corner.
According to a recent update from the IRS, nearly 100 million American households could see their average tax refund jump by $1,000 thanks to new tax credits under the “Working Families Tax Cuts.” These credits introduce some welcome relief, including no tax on tips, overtime, Social Security, and – here’s a big one for many – interest paid on auto loans for American-made cars. Taxpayers are strongly encouraged to check their eligibility and take advantage of these increased cuts.
Decoding the Auto Loan Deduction
A key component of these new benefits comes from the “One Big, Beautiful Bill Act” (OBBA), which approved a new tax credit allowing taxpayers to deduct a portion of their auto loan interest paid in 2025. However, there are some important details to note: this credit applies only to new vehicles that underwent final assembly in the U.S.
To qualify for this specific deduction, taxpayers must earn $150,000 or less. The car must have been purchased in 2025 and meet the “Made in U.S.” criteria.
When filing, borrowers will need to provide the Vehicle Identification Number (VIN). Cherry Dale, vice president of financial education at Virginia Credit Union, explained to Knoe that this deduction is also available for those who don’t itemize, making it accessible to a wider range of taxpayers.
Dale clarified, “Keep in mind it’s the interest, not the entire payment of that car,” and noted that these deductions are capped at $10,000. While most borrowers won’t pay that much in loan interest, every bit of deduction can certainly help.
It’s important to remember that not all car loans will qualify. Last year, only 30% of cars sold in the U.S. underwent final assembly here, according to the National Highway Traffic Safety Administration.
Additionally, the car must have been purchased for personal use, and the loan must have originated after December 31, 2024. So, while around 100 million Americans currently have car loans, only a select group will be eligible for this particular refund.
The actual tax savings will also vary based on the borrower’s marginal tax bracket; for instance, individuals in the 10% bracket could save about $1,000, while those in the 22% bracket might save around $2,000, as calculated by Newsweek.
Beyond Auto Loans: More Savings on the Horizon
The OBBA extends its generosity beyond auto loan deductions. Americans can also benefit from new “no tax” provisions on tips, overtime, and Social Security, alongside a boosted child tax credit, a doubled standard deduction, and $1,000 for children’s “Trump accounts.”
The Treasury Department has announced that these combined rules are expected to increase IRS refunds by an average of $1,000 per household, impacting 100 million households. Specifically, about 7.5 million families with two children could see an average tax cut of $1,700 due to the enhanced child tax credit.
With the tax filing season now open, President Trump’s Working Families Tax Cuts are poised to deliver some of the largest refunds in American history. The Treasury Department previously highlighted that the standard deduction has been doubled, affecting nearly 90% of taxpayers.
Tax experts anticipate significant increases in refunds. Heather Berger, a U.S. economist with Morgan Stanley, told CNBC, “Overall, we’re expecting these changes to increase refunds by 15% to 20% on average.”
Don’t miss out on these potential savings. It’s a great time to review your eligibility and make sure you’re taking advantage of every credit and deduction available.