Form 1098-VLI is a new IRS information return used by lenders to report interest of $600 or more received on a Specified Passenger Vehicle Loan (SPVL) from an individual borrower during the calendar year. Created under the One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, this form supports a new federal tax deduction for qualified vehicle loan interest available for tax years 2025 through 2028.
Our platform makes 1098-VLI eFiling fast, accurate, and IRS-compliant — whether you’re a bank, credit union, auto lender, or loan servicer handling vehicle loan portfolios of any size.
Form 1098-VLI — the Vehicle Loan Interest Statement — is the IRS information return filed by lenders to report qualifying interest received on Specified Passenger Vehicle Loans (SPVLs). Borrowers use the amount reported on Form 1098-VLI to claim the vehicle loan interest deduction — up to $10,000 per year above-the-line, available whether they itemize or take the standard deduction — on Schedule 1-A of their federal return, subject to MAGI phaseout limits.
Important: Tax year 2025 was a transition year. Lenders were not required to file Form 1098-VLI with the IRS for 2025, but were required to make total SPVL interest information available to borrowers by January 31, 2026. Tax year 2026 is the first mandatory full filing year, with official Form 1098-VLI required for both IRS submission and borrower delivery.
You must file Form 1098-VLI if you received $600 or more in interest on a Specified Passenger Vehicle Loan (SPVL) from an individual borrower during the calendar year in the course of your trade or business. Filers include:
Note: If you collect SPVL interest on behalf of another party and are the first to receive the funds, you must file using your own name, address, TIN, and phone number — even if you pass the interest on to another entity. The party you collected it for is not required to file. Filers are not required to file when the payer of record is a nonresident alien, foreign non-grantor trust, or foreign estate.
A Specified Passenger Vehicle Loan (SPVL) is a loan that meets all of the following criteria:
Note: A refinanced SPVL may also qualify as an SPVL if the new loan is secured by a first lien on the original vehicle. Loans cease to qualify as SPVLs if the original obligor is replaced by another individual borrower.
|
Milestone |
Deadline |
|
Borrower copies furnished |
January 31 |
|
IRS paper filing |
February 28 |
|
IRS eFile submission |
March 31 |
Phase-in schedule:
Late or incorrect filings may result in IRS information return penalties. The IRS has indicated penalty relief for good-faith filers during the initial rollout period; consult current IRS guidance and your tax advisor for the latest relief provisions.
The OBBBA introduced a new federal deduction for qualifying passenger vehicle loan interest for tax years 2025 through 2028. Key details for borrowers:
What is Form 1098-VLI used for?
Form 1098-VLI is used by lenders to report interest of $600 or more received on a Specified Passenger Vehicle Loan (SPVL) from an individual borrower. Borrowers use it to claim the vehicle loan interest deduction — up to $10,000 per year — on their federal income tax return.
What law created Form 1098-VLI?
Form 1098-VLI was created under the One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025. The OBBBA introduced a new deduction under IRC § 163(h)(4) for qualified passenger vehicle loan interest for tax years 2025 through 2028, and added IRC § 6050AA requiring lenders to report that interest.
Who must file Form 1098-VLI?
Banks, credit unions, auto lenders, loan servicers, and any other institution that receives $600 or more in interest on a qualifying vehicle loan from an individual borrower during the calendar year must file Form 1098-VLI.
What vehicles qualify for Form 1098-VLI reporting?
The vehicle must be a new passenger vehicle — including cars, SUVs, minivans, vans, pickup trucks, and motorcycles under 14,000 lbs — with no prior owners or title transfers, assembled in the United States, and purchased for personal use after December 31, 2024.
Was Form 1098-VLI required for tax year 2025?
No. Tax year 2025 was a transition year. Under IRS Notice 2025-57, lenders were not required to file Form 1098-VLI with the IRS for 2025, but were required to make total SPVL interest information available to borrowers by January 31, 2026. Tax year 2026 is the first mandatory full filing year.
When is Form 1098-VLI due?
Borrower copies must be furnished by January 31 of the year following the tax year. IRS paper filings are due February 28 and IRS electronic filings are due March 31.
How much can borrowers deduct using Form 1098-VLI?
Borrowers may deduct up to $10,000 per year of qualifying vehicle loan interest as an above-the-line deduction available for tax years 2025 through 2028. The deduction phases out for single filers with MAGI over $100,000 and married filing jointly filers with MAGI over $200,000.
Can I file multiple 1098-VLI forms at once?
Yes. Our platform supports bulk uploads so auto lenders and servicers can file for large portfolios of borrowers in a single submission.
Does Form 1098-VLI apply to used vehicles or refinanced loans?
No — the vehicle must be new with no prior owners or title transfers. A refinanced loan may still qualify as an SPVL if the new loan is secured by a first lien on the same qualifying vehicle and the original borrower remains the obligor.
Stay ahead of this new vehicle loan interest reporting requirement. Start your free 7-day trial and eFile 1098-VLI forms directly with the IRS today.
