We previously sent announcements regarding the One Big Beautiful Bill Act and the provision “No Tax on Car Loan Interest” paid by borrowers. Eligibility criteria can be reviewed on the IRS website. Additionally, having received information from the IRS, we can now share the following details on what these changes will mean for your organization.
Under current guidance, the IRS will consider that lenders have met their reporting obligations for interest received on a qualified passenger car loan in 2025 if they make a statement available to the buyer indicating the total amount of interest received. Specifically, lenders can meet their reporting requirements by making this total amount of interest available:
- On an online portal that the buyer can easily access;
- In a regular monthly statement;
- On an annual statement that is provided to the buyer; or
- By other similar means designed to provide accurate information to the buyer regarding interest received.
In addition, the IRS will not impose penalties on lenders for a failure to file information returns and provide payee statements if they satisfy their reporting obligations as described.
Members can use the Annual Account Information at the bottom of their year-end statement, or located in the loan account section, to determine their year-to-date interest paid for use in the interest deduction.
We recommend that you continue to flag qualifying loans accordingly. We will be working on a project for the 2026 tax year, which we will provide additional information about in the months ahead.
