The IRS has finalized its regulations for reporting Form 1098-VLI. The form reports vehicle loan interest to support the deduction created by the 2025 reconciliation bill. It is issued by lender-payees to debtor-payors.
Briefly, the form requires lenders to report the interest paid by the recipient on a qualifying vehicle loan. Information required to be reported includes the identity of the lender, the amount of interest paid for the year, the principal of the loan, the loan’s date of origin, and information about the vehicle underlying the loan.
The regulations also provide deeper instructions on niche scenarios such as interest allocation and securitized loans.
Copies of the form must be issued to payor-recipients by January 31, and to the IRS by February 28 (for paper filing) or March 31 (for electronic filing). At present, the IRS has released drafts of the actual form and its instructions, with final copies expected to be published soon.
To review the regulations, follow this link.
