Car loan interest / Form 1098-VLI
26 U.S.C. § 163(h)(4) · tax years 2025–2028
Form 1098-VLI, box by box
Form 1098-VLI is the statement your lender sends for the new car loan interest deduction. It shows the interest on the qualifying part of your loan, the VIN, and two checkboxes that matter a lot: whether you were the vehicle’s first user, and whether its final assembly happened in the United States.
Check your VIN and estimate the deduction
Who gets one
- A lender in a trade or business, including a dealer that finances the sale, files one for each qualifying loan on which it received $600 or more of interest during the calendar year.
- The loan must be incurred after 2024 to buy a new-to-you car, minivan, van, SUV, pickup, or motorcycle under 14,000 pounds GVWR, for personal use, secured by a first lien, with U.S. final assembly.
- Loans from a related person are never qualifying loans, and no form is filed when the payer of record is a nonresident alien.
- The December 2026 revision of the form is used for 2026 and later years. For 2025, lenders could instead show the year’s interest in an online portal, monthly statement, or annual statement by January 31, 2026 (Notice 2025-57).
What each box means
| Box | What it shows |
|---|---|
| Box 1 | Vehicle loan interest received by lender. Interest you paid during the calendar year on the qualifying part of the loan. It already leaves out interest on parts of the loan that do not qualify, such as rolled-in negative equity, cash back from the lender, or a trailer financed in the same deal. This is the number that usually goes on Schedule 1-A. |
| Boxes 2a–2c | Year, make, model. The vehicle the loan was made for. Compare it with your title. |
| Box 2d | VIN. The vehicle identification number. You must put the VIN on your return for each year you claim the deduction, so copy it from here or your registration. You can also check what NHTSA says about its plant. |
| Box 3a | Loan origination date. When the loan was made with the original lender. The loan has to be incurred after December 31, 2024. |
| Box 3b | Loan acquisition date. Filled in only if your loan was sold or transferred to the lender that sent the form. Blank otherwise. |
| Box 4 | Outstanding principal. Principal on January 1 of the year, or on the origination or acquisition date if that happened during the year. |
| Box 5 | Refund of overpaid interest. Interest the lender refunded or credited this year that you overpaid in an earlier year. The earlier year’s form is not corrected. |
| Box 6 | Original use began with the payer of record. Checked when the lender treats you as the vehicle’s first user. Used vehicles generally fail this test. Also checked if you took over the loan because the previous borrower died. |
| Box 7 | Final assembly in the United States. Checked when final assembly happened in the U.S. Lenders may rely on the plant of manufacture coded in the VIN or on the final-assembly point on the vehicle’s label. |
What is in box 1 and what is not
Interest included when financed in the purchase
- The vehicle itself and its accessories bought in the deal
- Service and repair plans, warranties, extended warranties
- Tire, wheel, paint, and interior protection; key fob plans
- GAP waiver or insurance; credit life, accident, and health products
- Sales tax, title, and registration fees
Interest left out
- Negative equity rolled in from a trade-in
- Cash proceeds you received from the lender
- Collision and liability insurance that is not a credit insurance product
- Unrelated property, such as a trailer or boat
- Prepaid interest that accrues after January 15 of the next year
A loan that mixes qualifying and non-qualifying amounts is allocated, and only the qualifying share of interest is reported. If the vehicle was replaced with a substitute because of an unforeseen event, the form shows the substitute vehicle’s VIN.
If something looks wrong
- Box 7 blank on a U.S.-built vehicle? Decode the VIN and read the final-assembly point on the vehicle label. Lenders may use either one. If both say U.S., ask the lender to review it.
- Wrong VIN or vehicle? Ask the lender for a corrected form. The VIN you put on your return should match the vehicle.
- Interest looks low? Check whether your deal rolled in negative equity or cash back. That share is excluded on purpose.
- No form at all? For 2025, look in your lender’s portal or year-end statement. For any year, a lender is not required to file below $600 of interest on a loan.
Claiming it
Enter the VIN and qualified interest on Schedule 1-A, Part IV. The deduction is at most $10,000 a year and is reduced by $200 for each $1,000, or part of $1,000, of modified adjusted gross income over $100,000 ($200,000 on a joint return). It is available whether or not you itemize. This is federal only. States decide separately whether to follow it; this site tracks state rules for tips and overtime.
Questions
What is Form 1098-VLI?
Form 1098-VLI, Vehicle Loan Interest Statement, is the information return a lender files to report interest of $600 or more it received during the year on a specified passenger vehicle loan. You get a copy. It supports the car loan interest deduction for 2025 through 2028, claimed on Schedule 1-A.
I did not get a Form 1098-VLI for 2025. Can I still deduct my car loan interest?
For 2025 the IRS let lenders skip the form. Under Notice 2025-57, a lender met its 2025 reporting duty by making the total 2025 interest available by January 31, 2026, for example in an online account portal, a monthly statement, or an annual statement. Look there for the 2025 figure. The deduction itself depends on whether the loan and vehicle qualify, not on receiving the form.
My lender did not send a form because I paid less than $600 of interest. Am I out?
No. The $600 figure is the lender’s filing threshold for each loan. It is not a limit on your deduction. Use your loan statements for the interest you paid, and you still need the VIN and a vehicle and loan that meet the tests.
Box 7 (final assembly) is not checked. What does that mean?
The lender did not determine that final assembly took place in the United States. Final assembly is required for the deduction. Check the VIN, which records the plant of manufacture, and the final-assembly point on the vehicle label. If they show U.S. assembly and you think the box is wrong, ask the lender about it before you file.
Box 6 (original use) is not checked. Does that rule me out?
Original use must begin with you, which generally means a new vehicle you were the first to take delivery of. A used vehicle generally does not qualify. If you bought new and the box is blank, ask the lender why.
Why is box 1 less than the total interest I paid?
Only interest on the qualifying part of the loan is reported. Money borrowed to pay off negative equity on a trade-in, cash proceeds from the lender, collision and liability insurance that is not a credit insurance product, and unrelated items like a trailer or boat are not part of the qualifying loan, so their interest is left out. Service contracts, GAP, extended warranties, sales tax, and title and registration fees financed in the purchase can be included.
I refinanced. Will I get a 1098-VLI?
A refinanced loan stays a qualifying loan only if it is secured by a first lien on the same vehicle, and only up to the old loan’s balance on the refinancing date. Principal and interest above that are split out pro rata and not reported. If a different person becomes the borrower in the refinance, the new loan does not qualify, except when that happens because the previous borrower died.
There are two borrowers on the loan. Who gets the form?
The lender prepares one Form 1098-VLI for the payer of record, the borrower its records list as the principal borrower, showing all the interest received on the loan, including payments someone else made for that borrower. The form is issued only if the payer of record is an individual, a decedent’s estate, or a nongrantor trust.
Where does the 1098-VLI amount go on my return?
On Schedule 1-A, Part IV. On the 2025 form you list each vehicle’s VIN with its qualified interest on line 22, the total is capped at $10,000 on line 24, and the income phaseout follows. The deduction does not require itemizing.