The recently passed One Big Beautiful Bill Act (the “Act”) included a provision for a new individual tax deduction related to certain personal automobile loan interest for the years 2025 through 2028. The Act also included reporting requirements applicable to lenders related to the interest received, including penalties for not meeting these requirements. The Internal Revenue Service (IRS) recently issued Notice 2025-57, providing transitional guidance and penalty relief related to these reporting requirements, for interest received prior to January 1, 2026.
Due to the understanding that, based on the date that the Act was passed, lenders may need additional time to adjust their reporting systems to comply with the new reporting requirements, the notice provides that a lender may satisfy the reporting requirements for interest received in calendar year 2025 on a specified passenger vehicle loan by making a statement available to the individual on or before January 31, 2026, indicating the total amount of interest received in 2025 on a specified passenger vehicle loan. This can be satisfied by:
- making this information available via an easily accessible online account portal;
- providing a regular monthly statement to the individual;
- providing an annual statement to the individual; or
- by other similar means designed to provide accurate information regarding interest paid.
The IRS will not impose any penalties related to the reporting of interest received on specified passenger vehicle loans, provided that the information is reported in the manner described above.
The guidance and relief provided by Notice 2025-57 are applicable only for interest received in 2025. It is expected that the IRS will provide further guidance, and possibly a new 1098 type form, for the reporting requirements applicable to years after 2025 at a later date.
If you wish to discuss the information in this tax alert further, please contact either Charles Marston at cmarston@srsnodgrass.com or Danelle Stewart at dstewart@srsnodgrass.com, or via phone at (724) 934-0344.
