Signed into law by President Trump on July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) (H.R. 1) adds section 6050AA to the Internal Revenue Code to adopt new information reporting requirement requiring businesses receiving interest on car loans from individuals to report specified information to the IRS (presumably on a new form in the 1098 series) and to provide a written statement to the payers. The requirement is similar to those under section 6050H for businesses receiving payments of mortgage interest. The requirement was adopted in conjunction with a new tax deduction for up to $10,000 in interest paid on loans used for the purchase of passenger vehicles assembled in the United States. (The deduction is subject to a phaseout for individuals with adjusted gross incomes above $100,000 ($200,000 for married filing jointly.)
As discussed below, the new requirements add a new information reporting burden on businesses that offer financing for passenger vehicles. Businesses receiving interest payments of $600 or more from any individual in a calendar year are now required to track and report detailed information regarding both the loan and the applicable interest received. These requirements are applicable to loans incurred after December 31, 2024.
The written statement is required to be furnished to payers by January 31 of the following calendar year. Although the OBBBA does not specify the filing deadline for the information return, it is anticipated that the deadline will be March 31 of the same year (i.e., 2026 for returns related to 2025) for those who file information returns electronically, consistent with the deadline for similar returns. Given that that the new requirements apply to interest payments received in calendar year 2025, the first returns would presumably be due early in 2026, though it is possible that the IRS will provide transition relief given the mid-year adoption.
The information return must contain the following information:
- the name and address of the individual from whom the interest was received;
- the amount of the interest received for the applicable calendar year;
- the amount of outstanding principal on the specified passenger vehicle loan as of the beginning of the applicable calendar year;
- the date of the origination of such loan;
- the year, make, model, and vehicle identification number of the applicable passenger vehicle that secures the loan (or another description of the vehicle as the Secretary of the Treasury may prescribe); and
- any other information that the Secretary of the Treasury may prescribe.
The written statement required to payers generally must contain the same information as the information return, plus the name and contact information for a person whom the payer can contact with questions.