Section 6050AA
Form 1098-VLI explained
Direct answer: Form 1098-VLI is the lender’s Vehicle Loan Interest Statement for specified passenger vehicle loan interest of $600 or more on one loan; use box 1 interest and the VIN when completing Schedule 1-A, but you can still claim a qualifying deduction without the form if you keep records.
Form 1098-VLI is the Vehicle Loan Interest Statement. Lenders use it to report interest on a specified passenger vehicle loan. Section 70203 of Public Law 119-21 added section 6050AA, and the IRS Instructions for Form 1098-VLI (Rev. December 2026)—continuous-use instructions posted on IRS.gov for calendar year 2026 and later until superseded (IRS About Form 1098-VLI last reviewed or updated October 1, 2026)—say to use that revision until the IRS issues a newer one. The June 16, 2026 draft Schedule 1-A tells borrowers that certain 2026 interest should appear in box 1.
Who has to file
File the form if, in a trade or business, you receive $600 or more of interest during the calendar year on any one specified passenger vehicle loan from an individual, a decedent’s estate, or a nongrantor trust. The instructions say to file a separate form for each loan. The $600 threshold is per loan. A borrower who paid $400 on one loan and $400 on another has not, by that fact alone, forced a form for either loan, even though the total is over $600. If you choose to file for a loan under $600, the instructions say the form’s rules then apply.
You can be required to file even if lending is not your main business, as long as you received the interest in a trade or business. The payer of record is the principal borrower on your books. If more than one person is on the loan, you prepare the form for the payer of record only. A parent who pays the child’s loan is not a new payer of record; the instructions say to report the interest as received from the payer of record.
The final regulations on information reporting, Treas. Reg. §1.6050AA-1, apply to calendar years beginning after December 31, 2024, and before January 1, 2029. The regulation document itself is effective November 9, 2026. For interest received in calendar year 2025, the preamble describes Notice 2025-57, 2025-45 I.R.B. 692: an interest recipient is treated as having met the reporting duty if it makes a statement available showing the total interest received in 2025 on the loan. The full Form 1098-VLI regime is what the December 2026 instructions describe for 2026.
The boxes
The IRS Rev. December 2026 instructions describe the boxes this way.
| Box | What it reports |
|---|---|
| 1 | Vehicle loan interest received from the payer of record during the calendar year. Do not include interest on the portion of the debt that is not a specified passenger vehicle loan. Prepaid interest is reported in the year it accrues, with a narrow exception for interest that accrues in full by January 15 of the next year. |
| 2a–2c | Year, make, and model. |
| 2d | The VIN of the vehicle the loan financed. |
| 3a | The origination date with the original lender. An assignee does not put the purchase date of the loan here. |
| 3b | The date the filer acquired the loan, if it was acquired. Otherwise blank. |
| 4 | Outstanding principal as of January 1, or as of origination or acquisition if that happened during the year. |
| 5 | A refund or credit of a prior year’s overpaid interest, when the reimbursement rules require it. |
| 6 | Checked if original use began with the payer of record. Also checked if the payer of record is an obligor because a previous obligor died. |
| 7 | Checked if final assembly occurred in the United States. The instructions say the filer may rely on the VIN plant of manufacture or on the label affixed to the vehicle. |
How a borrower uses box 1
Box 1 is the lender’s number for interest on the specified passenger vehicle loan. On the 2025 Schedule 1-A you still start from qualified interest, then subtract any amount you deduct on Schedule C, E, or F, and enter the rest in column (iii). The 2026 draft points at box 1 as the source for 2026 interest and keeps that same subtraction. If the loan mixed qualified purchase amounts with negative equity or cash-out, the instructions tell the lender not to put the nonqualified interest in box 1. If your statement looks like it includes a trade-in’s payoff, do not assume every dollar is deductible. The allocation rules are on the eligibility page.
A missing form does not, by itself, forbid a deduction you otherwise qualify for. Interest under $600 may never be reported. For 2025 you may have a transition statement instead of this form. You still have to be eligible, you still have to report the VIN, and you still need records of the interest. Box 5, a refund of interest you deducted in an earlier year, can have its own tax effect under the tax-benefit rule. This site’s calculator does not apply that rule. Do not subtract a prior-year refund from this year’s interest unless you know that is the right adjustment on your return.
The 1098-VLI instructions tell filers to follow Publication 1099 for when and where to file and for statements to recipients. This page does not restate a due date from that publication. Check the current Publication 1099 before you rely on a deadline.
Sources
- Instructions for Form 1098-VLI (Rev. December 2026). IRS continuous-use instructions labeled December 2026 (HTML). Use for calendar year 2026 and later until superseded. PDF: irs.gov/pub/irs-pdf/i1098vli.pdf. About page last reviewed/updated by IRS on October 1, 2026. Who files, the $600-per-loan threshold, boxes 1–7.
- Final regulations, Car Loan Interest Deduction (Sept. 8, 2026). Treasury Decision published at 91 FR. Effective November 9, 2026. Treas. Reg. §§1.163-16 and 1.6050AA-1 apply to tax years 2025–2028.
- 2025 Schedule 1-A (Form 1040). Part I MAGI lines 1–3 and Part IV lines 22–30. Line 38 is the total additional deductions.
- 2026 draft Schedule 1-A (created June 16, 2026). Draft — do not file. Part IV is lines 28–36. Line 44 goes to Form 1040 line 13a on this draft. Line numbers can change.
- IRS newsroom: What you will need to file. Documents for the qualified passenger vehicle loan interest deduction, reported on Schedule 1-A, Part IV.
- About Form 1098-VLI (IRS). IRS landing page for the form and instructions. Page last reviewed or updated October 1, 2026.
- Form 1098-VLI, Vehicle Loan Interest Statement (current PDF). Current form PDF linked from the IRS About Form 1098-VLI page.