Form 1098-VLI Instructions: Box-by-Box Guide for Lenders

Form 1098-VLI Instructions for Lenders

This guide walks through every field on the Vehicle Loan Interest Statement from the filer's perspective: what goes in each box, where the data usually lives in a loan servicing system, and which values the IRS validates when the form is e-filed through IRIS. For background on who must file at all, start with what is Form 1098-VLI.

Box 1: Vehicle Loan Interest Received by Lender

The total interest received on the specified passenger vehicle loan from the payer of record during the calendar year. This is the number the borrower will use for the car loan interest deduction, and the form is required once this amount reaches $600 for the year. Report interest actually received, not interest accrued or billed.

Boxes 2a Through 2d: The Vehicle

These fields come straight from the collateral record. Cleaning them up before filing season matters because the VIN appears on the borrower's copy, and a wrong VIN invites correction requests at tax time.

Boxes 3a and 3b: Loan Date and Acquisition Date

Box 3a is the date the loan was originated with the original lender. The IRS enforces that this date is after December 31, 2024: earlier loans are outside the deduction and outside this form. Box 3b is the date your institution acquired the loan, which matters for loans bought from another lender or servicer. For loans you originated yourself, the acquisition date follows the origination.

Box 4: Outstanding Principal

The outstanding principal on the loan as of January 1 of the calendar year. If the loan originated during the year, report the origination amount instead. This box is always completed, even when the value is zero.

Box 5: Refund of Overpaid Interest

If you refunded or credited interest the borrower overpaid in a prior year, report that amount here. Leave the box empty when there was no refund; do not net refunds against box 1.

Boxes 6 and 7: The Qualification Checkboxes

• Box 6: check if the original use of the vehicle began with the purchaser, meaning the borrower bought the vehicle new. The deduction is limited to new vehicles, so this checkbox is central to the borrower's eligibility.
• Box 7: check if the final assembly of the vehicle occurred in the United States. This is the second eligibility condition, determined by where the vehicle was assembled (the VIN and the manufacturer's documentation establish this).

Lenders report the facts; the borrower and their tax preparer draw the conclusion. Our borrower-side guide to the car loan interest deduction explains how these boxes translate into a deduction.

Borrower Identity and Account Number

Each form carries the borrower's name, address, and TIN, and, unlike many information returns, the account number is mandatory on the 1098-VLI. Use the loan number or another identifier that is unique per form; it is how corrections are matched later.

File It with BoomTax

BoomTax validates every field above against the IRS rules, generates the IRIS XML, e-files, and delivers borrower copies. See e-file Form 1098-VLI online for how the pipeline works, and the due date page for the season's deadlines.

External Resources

• IRS: Instructions for Form 1098-VLI (draft)
• IRS: E-file information returns with IRIS

Frequently Asked Questions About Completing Form 1098-VLI