Form 1098-VLI (Vehicle Loan Interest) exists because a recent tax law lets many taxpayers deduct interest on a loan for a qualifying new personal-use vehicle. To make that deduction verifiable, lenders who receive the interest in the course of their business must report it: file a 1098-VLI with the IRS and send the borrower a copy showing the interest they paid. If you originate or service auto loans, you are the filer.
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What Form 1098-VLI Reports
The form does one focused job: it documents the interest a borrower paid on a qualifying vehicle loan during the year, so the borrower can substantiate the new deduction and the IRS can match it.
Alongside the interest amount, the form carries the details that tie the loan to a specific vehicle and borrower — including the vehicle identification number (VIN) — so the IRS can confirm the loan financed an eligible vehicle rather than, say, a lease or a business fleet purchase.
It sits next to the other 1098-series returns you may already know: 1098 for mortgage interest, 1098-E for student-loan interest, and now 1098-VLI for vehicle-loan interest. Same idea, new category.
Who Has to File a 1098-VLI
You file if you received qualifying vehicle-loan interest in the course of a trade or business and the amount for a borrower reaches the reporting threshold for the year. That squarely covers the institutions that hold auto paper:
- Banks and credit unions that make auto loans
- Captive auto-finance companies (the lending arms of manufacturers)
- Dealers and finance companies that originate and hold retail installment contracts
- Loan servicers collecting interest on behalf of the note holder
The underlying deduction is limited — it targets loans for new, personal-use vehicles that meet the law’s assembly and eligibility conditions, and it is temporary. Report interest for loans that meet the criteria in the current IRS instructions; when in doubt, follow the instructions rather than reporting everything.
Who Receives the Statement
The borrower gets a copy. An individual who took out a qualifying loan and paid $600 or more in interest for the year should receive a 1098-VLI showing that interest, which they use when claiming the deduction on their return. Because the IRS gets the same figure, a borrower who claims more than you reported is an easy mismatch to spot.
Filing 1098-VLI Through IRIS
1098-VLI is a native form type in the IRIS TY2026 schema, so its fields — interest received, VIN, and the borrower details — map to dedicated elements rather than being forced into a generic 1098.
Auto lenders tend to file at volume, which means electronic filing through IRIS, not paper. The mechanics are the same as the rest of the 1099/1098 series: assemble the records, validate against the IRS rules, transmit, and collect a Receipt ID.
Reporting thousands of auto loans?
e1099f validates and files 1098-VLI as IRIS XML, VIN and all — from the data you already have.
Frequently Asked Questions
When is the first 1098-VLI required?
What is the reporting threshold?
Do leases count?
Why does the form need the VIN?
Can I file 1098-VLI through IRIS?
We service loans we did not originate. Do we file?
Not tax advice. Form 1098-VLI and the underlying deduction are new and time-limited; the current IRS instructions and law are authoritative and may change. Confirm your obligations with a qualified advisor.