What this line means
The amount of state and local personal property taxes you paid during the year. Personal property tax is an annual tax based on the value of property you own, most commonly vehicles. To qualify, the tax must be based on the value of the property, not a flat fee. This amount is combined with your other state and local taxes and subject to the $40,000 SALT cap ($20,000 MFS) for 2025.
Does this apply to you?
- You paid annual vehicle registration fees that include a value-based tax component
- You paid personal property tax on boats, RVs, airplanes, or other registered personal property
- You live in a state that levies annual personal property taxes on vehicles (Virginia, Connecticut, Rhode Island, etc.)
Easy to overlook
Only the value-based portion of vehicle registration qualifies Many states charge a flat registration fee plus a value-based tax. Only the portion based on the vehicle’s value is deductible. A $200 registration that includes a $50 flat fee and a $150 value-based tax gives you a $150 deduction, not $200. Your state’s DMV documentation usually breaks this out. 1 IRS Schedule A instructions — Line 5b
This deduction applies even if you take the standard deduction for income/sales tax Personal property tax is separate from the income/sales tax election on line 5a. You can deduct personal property tax regardless of which option you chose on 5a. Both amounts are added together before applying the SALT cap. 2 General filing pattern — vehicle registration personal property tax
Watch out for this
Deducting the entire vehicle registration fee when only part of it is a value-based tax. Most state registration fees include multiple components: title fees, plate fees, highway use taxes, and the actual ad valorem (value-based) tax. Only the ad valorem portion qualifies. Check your registration receipt for the breakdown.
Footnotes
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IRS Schedule A (Form 1040) Instructions, Line 5b. https://www.irs.gov/instructions/i1040sca ↩
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IRS Schedule A (Form 1040) Instructions. See also IRS Publication 17, Your Federal Income Tax. https://www.irs.gov/pub/irs-pdf/p17.pdf ↩