Form 1098-VLI explained, and the 2025 transition relief

Form 1098-VLI is the statement your lender uses to report the car loan interest that supports the 2026 deduction. If you understand it, claiming the deduction is straightforward.

What the form is

Form 1098-VLI, the Vehicle Loan Interest statement, mirrors the familiar mortgage-interest Form 1098. A lender must issue it to any borrower who paid $600 or more of qualifying interest on a qualifying vehicle loan during a calendar year, and must send it by January 31 of the following year. The interest figure it reports is the starting amount you use to claim the deduction, before the $10,000 cap and the income phaseout are applied.

The 2025 transition relief

Because the reporting system was brand new for 2025, the IRS issued Notice 2025-57 to ease the first year. For the 2025 tax year, a lender can satisfy its obligation by making the interest total available through a statement, an online portal, a monthly statement, or an annual statement, rather than a formal Form 1098-VLI. Just as importantly, a borrower may rely on that lender-provided figure to claim the deduction even without a formal form. The IRS also said it would not penalize lenders that used these alternative methods in good faith for 2025.

What this means for you

If you paid qualifying car loan interest in 2025, look for the interest total your lender provided, whether on a Form 1098-VLI or on a statement or portal. Use that figure in the calculator and on your return. From 2026 forward, the finalized Form 1098-VLI is the standard document, so expect to receive one if you paid $600 or more of qualifying interest.

Keep your records

Save the Form 1098-VLI or lender statement with your loan documents and the vehicle's VIN and assembly information. Together they support both the interest figure and the vehicle's eligibility if your return is ever questioned.

This guide is general information, not tax advice.