The Internal Revenue Service (IRS) has issued transitional relief in Notice 2025-57 for businesses that receive interest on specified passenger vehicle loans.
The “One Big, Beautiful Bill” allows certain taxpayers to deduct interest paid on a “qualified passenger vehicle” loan for taxable years 2025 through 2028. Businesses that receive from any individual interest of $600 or more for any calendar year on a qualified passenger vehicle loan must comply with the new reporting requirements.
For 2025, the IRS will consider that lenders have met their reporting obligations for interest received on a qualified passenger car loan if they make a statement available to the buyer indicating the total amount of interest received during calendar year 2025.
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.
The statement should be made available to the buyer by January 31, 2026.
If a lender satisfies these reporting obligations, the IRS will not impose penalties on lenders for a failure to file information returns and provide payee statements.
