Form 1098-VLI, Explained
Bought a car recently? A new tax form is landing in mailboxes: Form 1098-VLI (Vehicle Loan Interest Statement). It's the key to the new deduction of up to $10,000 in car-loan interest.
What Form 1098-VLI is
Starting with tax year 2026, lenders that receive $600 or more of interest on a qualifying vehicle loan must send borrowers Form 1098-VLI, showing the interest you paid during the year — the same way Form 1098 works for mortgage interest. You'll get it from your bank, credit union, or the automaker's finance arm (Ford Credit, Toyota Financial, etc.) by early February.
What to do with it
- Check the interest amount against your own loan statements.
- Confirm your vehicle qualifies: new (not used) personal-use vehicle, final assembly in the US, under 14,000 lbs, loan originated after Dec 31, 2024, secured by the vehicle.
- Have your VIN ready — the deduction requires reporting the vehicle identification number on your return.
- Claim the deduction on Schedule 1-A with your federal return — no itemizing needed. Estimate your savings first with the car loan interest deduction calculator.
Didn't get one?
Three common reasons: you paid under $600 of interest (you can still claim it — use your loan statements), your loan doesn't qualify (used vehicle, lease, or pre-2025 loan), or your lender is late. For 2025 returns filed in 2026, many lenders weren't yet required to send the form — your year-end loan statement showing interest paid is acceptable documentation.
Watch the income limits
The deduction phases out between $100,000–$150,000 MAGI (single) and $200,000–$250,000 (joint) — $200 lost per $1,000 over the threshold.
Frequently asked questions
When does Form 1098-VLI arrive?
By January 31 following the tax year, like other 1098/1099 forms. Check your lender's online portal if the paper copy doesn't show up.
My lender sent nothing but I paid interest. Can I still deduct?
Yes, if the loan and vehicle qualify. The form is a reporting mechanism, not an eligibility requirement — your loan statements document the interest.
Does refinancing kill the deduction?
No. Refinancing a qualifying post-2024 loan generally preserves eligibility, up to the original loan balance.
Do I need to itemize to use Form 1098-VLI?
No — the car loan interest deduction is claimed on top of the standard deduction through 2028.