Overview
- Lenders can meet 2025 obligations under Notice 2025-57 by giving borrowers a statement of total interest via an online portal, monthly or annual statements, or a comparable reliable method.
- For 2025, the IRS will not impose penalties on lenders that follow the Notice’s alternative statement approach in lieu of filing traditional information returns and payee statements.
- The reporting rules apply to businesses that receive at least $600 in interest from an individual on a qualified passenger vehicle loan.
- The new deduction covers interest on loans originated after Dec. 31, 2024 and before Jan. 1, 2029 for U.S.-assembled passenger vehicles under 14,000 pounds, excluding leases and used-vehicle loans; borrowers should retain VIN and proof of U.S. assembly.
- Lenders are advised to make 2025 interest statements available by Jan. 31, 2026, while taxpayers will claim the benefit on a forthcoming Schedule 1-A, and the deduction is subject to income-based phaseouts reported to begin at $100,000 MAGI ($200,000 for joint filers).