Exclusion of interest payments on credit card debt

(a) In general Part VI of subchapter B of chapter 1 of subtitle A is further amended by redesignating section 227 as section 228 and inserting after section 226 the following new section: 227. Credit card interest payments (a) In general In the case of an individual, there shall be allowed as a deduction for the taxable year an amount equal to so much of the interest paid by the individual during the taxable year on an open-end credit plan involving a credit card as does not exceed $2,500. (b) Definitions The terms open end consumer credit plan and credit card have the meaning given such terms in section 103 of the Truth in Lending Act.. (b) Deduction allowed to non-Itemizers Section 63(b) is further amended by striking and at the end of paragraph (6), by striking the period at the end of paragraph (7) and inserting, and, and by adding at the end the following new paragraph: (8) the deduction provided in section 227.. (c) Clerical amendment The table of sections for part VI of subchapter B of chapter 1 of subtitle A is further amended by striking the item relating to section 226 (as added by section 6) and inserting the following new items: Sec. 227.Credit card interest payments. Sec. 228. Cross reference.. (d) Effective date The amendment made by this section shall apply to taxable years beginning after December 31, 2026.