The headline
There’s a new information-reporting regime for interest on certain passenger vehicle loans. The IRS announced transition relief for 2025 — basically, “We know you’re not fully ready, but you still have to start preparing.”
Who this affects
If your business receives $600 or more in interest from a borrower in a year on a qualifying auto loan, you could be considered a “reporter.” That means you may have to file an information return showing how much interest you collected for that borrower.
What you should be doing now
- Identify who in your structure is actually receiving the interest (lender? servicer? affiliate?).
- Map the data: borrower name, tax ID, total interest per year.
- Confirm timing and format for 2025 so you’re not scrambling at year-end.
- Document “good-faith effort.” The IRS offers penalty relief for people who are clearly trying to comply — not for people who ignored it.
FAQ
- Is this just a mortgage-style 1098? No. This is its own thing for vehicle loans — not mortgages, not credit cards.
- I’m a small dealer who holds a few notes in-house. Do I count? Maybe. If you’re holding paper and collecting interest, you might. You can’t assume you’re exempt just because you’re “small.”
How Black Inc can help
- Exposure check: We’ll walk through how you book interest and tell you if you’re in reporting territory.
- Data prep: We help you figure out what fields you need to start tracking now, so you’re not rebuilding history later.
- Penalty shield: We document that “good faith” compliance effort so you have a defensible story if penalties get proposed.
Ongoing support: We can maintain this for you if you don’t want to build that workflow in-house.