Auto Loan Interest Tax Information

IRS New Car Loan Interest Reporting Requirements. 





































The IRS provided transitional guidance (Notice 2025-57) on October 21, 2025 for reporting car loan interest information to comply with H.R.1 One Big Beautiful Bill Act (OBBBA) which was signed into law July 4, 2025 and included a provision for individual taxpayers to deduct up to $10,000 on their tax returns and applies to tax years 2025 - 2028. Under new section 6050AA of the Internal Revenue Code, Five Star Credit Union is required to report interest received from any individual aggregating $600 or more on a specified passenger vehicle loan incurred after December 31, 2024. A “specified passenger vehicle loan” (SPVL) is indebtedness incurred by the taxpayer during the taxable year, for the purchase of, and that is secured by a first lien on, an applicable passenger vehicle for personal use (i.e., non-business, non-commercial) only. An "applicable passenger vehicle" (APV) means any vehicle -

1. The original use of which commences with the taxpayer (must be new not used -original use commences with the first person that takes delivery of a vehicle after the vehicle is sold, registered, or titled);

2. Which is manufactured primarily for use on public streets, roads, and highways (not including a vehicle operated exclusively on a rail or rails; also excludes unicycles, golf carts, campers, and ATVs);

3. Which has at least 2 wheels;

4. Which is a car, minivan, van, sport utility vehicle, pickup truck, or motorcycle;

5. Which is treated as a motor vehicle for purposes of Title II of the Clean Air Act;

6. Which has a gross vehicle weight rating of less than 14,000 pounds; and

7. Which the final assembly of occurred within the United States. (Dealers will be able to provide clarity on the final assembly location. Specifically, the vehicle information label attached to a vehicle on a dealer's lot should list the factory where final assembly occurred. Also, a vehicle’s VIN number can be used to determine the final assembly location by using the National Highway Traffic Safety Administration's VIN decoder website (https://www.nhtsa.gov/vin-decoder) to determine where final assembly occurred.)

The IRS transitional guidance explained that the credit union can satisfy its reporting obligations 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 calendar year 2025 on a specified passenger vehicle loan. This statement is being provided for that purpose.

The information provided herein is not and shall not be construed as tax, accounting, legal, regulatory or other professional advice or sufficient to satisfy any tax, accounting, legal, regulatory or other professional requirements. Member and/or User should consult tax, accounting, legal, regulatory or other professional advisor(s) for advisor(s) for advice. 






 Frequently Asked Questions 

In 2025, federal law introduced a new tax provision that may allow eligible individual taxpayers to deduct up to $10,000 of interest paid on certain new passenger vehicle loans on their federal income tax returns. This provision applies to tax years 2025 through 2028 and is subject to IRS rules and limitations.

The IRS issued transitional guidance (Notice 2025-57) that allows lenders, including Five Star Credit Union, to provide borrowers with interest information for calendar year 2025 to help with tax preparation.

If you paid $600 or more in interest during 2025 on a loan that may qualify as a Specified Passenger Vehicle Loan, Five Star Credit Union is required to report that interest and provide you with a statement.

A Specified Passenger Vehicle Loan generally means a loan that:

  • Was incurred after December 31, 2024
  • Was used to purchase a new passenger vehicle
  • Is for personal (non-business, non-commercial) use
  • Is secured by a first lien on the vehicle

An applicable passenger vehicle is generally a vehicle that:

  • Is new (original use begins with the taxpayer)
  • Is manufactured primarily for use on public streets and highways
  • Has at least two wheels
  • Is a car, minivan, van, SUV, pickup truck, or motorcycle
  • Is treated as a motor vehicle under the Clean Air Act
  • Has a gross vehicle weight rating under 14,000 pounds
  • Was finally assembled in the United States

 

Dealers can often provide information about final assembly. In addition, a vehicle’s VIN can be used with the National Highway Traffic Safety Administration’s VIN decoder at nhtsa.gov/vin-decoder.

Not necessarily. Five Star Credit Union cannot determine:

  • Whether your vehicle qualifies
  • Whether your loan qualifies
  • Whether you are eligible to claim the deduction
 

Eligibility depends on your individual tax situation and IRS rules. We recommend consulting a qualified tax professional.

Eligible taxpayers may be able to deduct up to $10,000 of qualifying passenger vehicle loan interest per year, subject to IRS rules and limitations.
If applicable, Five Star Credit Union will provide you with an Auto Loan Interest Summary Statement showing the total interest received during the calendar year. For calendar year 2025, this statement will be made available on or before January 31, 2026
No. This is a separate tax provision specifically related to certain passenger vehicle loans and has its own eligibility rules.
No. Five Star Credit Union does not file this deduction on your behalf. If eligible, you or your tax professional must claim it when preparing your federal income tax return.
No. The information provided by Five Star Credit Union is for general informational and reporting purposes only and should not be considered tax, legal, or accounting advice. Members should consult their own professional advisors regarding eligibility and reporting.
If you have questions about your loan or statement, please contact Five Star Credit Union. For questions about tax eligibility or deductions, please consult a qualified tax professional.