IRS
America’s Credit Unions is urging the Internal Revenue Service to issue detailed guidance on several provisions of H.R. 1, which is Congress’s sweeping tax package that created a new vehicle-loan interest deduction and reporting structure beginning in 2025. In a Dec. 5 letter to Treasury Secretary Scott Bessent, the association said credit unions need clear, immediate implementation rules to avoid consumer confusion and costly reporting errors.
The law requires lenders to report when a borrower pays $600 or more in interest on a “specified passenger vehicle loan,” but America’s Credit Unions noted that lenders still lack answers on who determines whether a car qualifies, how to handle refinanced loans and what loan data must be included. It also asked the IRS to clarify whether credit unions can rely on manufacturers for vehicle eligibility information and how to avoid miscalculations that could cause members to incorrectly claim or miss deductions.
The group is also seeking guidance on reporting the outstanding principal balance, set to become an annual requirement starting in 2026, and on how the IRS will administer a new remittance transfer tax included in the law.
Without timely rules, “taxpayers could miss out on their deduction” and credit unions could face compliance burdens that risk “unnecessary penalties,” the letter warned. America’s Credit Unions said it stands ready to work with the IRS but urged officials to issue clarifications “as soon as possible” to ensure a smooth rollout for lenders and borrowers alike.
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