1098-VLI Filing Deadlines: What Auto Lenders Must Know

Auto lenders operating under the One Big Beautiful Bill Act face two hard dates every year - and missing either one triggers penalties that compound quickly. The 1098-VLI filing deadlines are January 31 for borrower copies and March 31 for electronic IRS submission. Those dates don't move, they don't bend for small lenders, and transitional relief no longer cushions the consequences.

I track IRS reporting requirements for vehicle loan interest because lenders who miss these deadlines aren't usually ignoring them - they're running out the clock on data preparation without realizing how close they are to the penalty window. This guide lays out both deadlines, what each requires, and what the penalty math looks like if you're late.

📅 1098-VLI Deadline Quick Reference

Date	What's Due
January 31	Borrower copies furnished (mailed or delivered)
February 28	Paper IRS filing (only if fewer than 10 returns)
March 31	Electronic IRS filing (required for 10+ returns)

Penalties begin the day after the applicable deadline. Both tracks (§6721 and §6722) run independently.

The Two Key Deadlines

Every auto lender subject to Form 1098-VLI reporting has two obligations each calendar year. They run on separate tracks with separate penalties:

Electronic filing is required if you have 10 or more information returns. Most auto lenders - including small buy-here-pay-here dealers with active portfolios - exceed that threshold and must file electronically by March 31. Paper filing by February 28 is only available to lenders with fewer than 10 total 1098-VLI returns for the year.

The two deadlines are independent. A lender can furnish borrower copies on time by January 31 and still face penalties for missing the March 31 IRS filing deadline. They're not linked - each has its own compliance clock and its own penalty exposure.

January 31 - Borrower Copy Furnishing Deadline

January 31 is the date by which every borrower who received a qualifying vehicle loan must have their copy of Form 1098-VLI in hand - or at minimum, sent. The IRS defines "furnished" as mailed or delivered, not received. A first-class mailing postmarked January 31 satisfies the requirement even if the borrower doesn't receive it until February.

What the borrower copy must include:

• Total interest received on the loan during the calendar year
• The VIN of the financed vehicle
• The loan origination date
• Lender name, address, and taxpayer identification number
• Borrower name and taxpayer identification number
• Outstanding principal balance as of January 1 of the reporting year The borrower uses this information to support their interest deduction on Schedule 1. If you furnish a copy with errors - wrong interest amount, transposed VIN, missing TIN - the borrower may file a deduction the IRS can't verify against your submission. That creates downstream problems for both parties.

January 31 is the earlier of the two deadlines and, for most lenders, the more operationally demanding one. Printing, addressing, and mailing hundreds or thousands of forms requires preparation that starts well before the new year. Lenders who treat January 31 as their data-finalization date rather than their mailing date regularly miss it. For a full breakdown of what every field on the form requires, see the Form 1098-VLI explained guide.

March 31 - IRS eFile Deadline (Paper: February 28)

March 31 is the IRS electronic filing deadline. By this date, your Form 1098-VLI data must be submitted to and accepted by the IRS Information Returns Intake System (IRIS). Submitted is not the same as accepted - file early enough to address any rejection notices before the deadline passes.

A few things that trip lenders up on the March 31 deadline:

TCC application delays. Lenders filing through IRIS directly need a Transmitter Control Code. That application process can take four to six weeks. Lenders who start the TCC application in February often can't complete IRIS setup in time for the March 31 deadline. Apply in November or December if you're filing directly.

Rejection and resubmission time. IRIS validates submissions and returns rejection codes for formatting errors, missing fields, and mismatched TINs. A submission rejected on March 29 may not leave enough time to correct and resubmit before March 31. Build in at least two weeks of buffer.

Batch upload formatting. Lenders with large portfolios submit via IRIS bulk upload, which requires a specific fixed-width file format. Data that looks correct in a spreadsheet often has formatting issues that cause rejection. Test your file format before the filing window opens.

For lenders using a third-party filing service, the March 31 deadline still applies - the service files on your behalf, but you're responsible for getting your data to the service with enough lead time for processing and submission. Most services set internal cutoff dates of March 15 to 20 to guarantee on-time IRS filing. Missing the service's internal deadline can mean missing the IRS deadline even if you submitted your data on March 28.

The broader context on these dates and the IRS reporting framework is covered in the IRS car loan interest reporting guide.

What Happens If You Miss a Deadline?

Missing a 1098-VLI deadline triggers penalties under IRC Sections 6721 and 6722 - failure to file with the IRS and failure to furnish to borrowers, respectively. The two penalty tracks run separately - you can owe penalties under both for the same form.

The penalty structure is tiered based on how late the correction happens:

• Within 30 days: $60 per return
• 31 days through August 1: $130 per return
• After August 1 / never filed: $330 per return
• Intentional disregard: $660 per return, no annual cap Each tier applies per form, not per filing. A lender with 200 reportable borrowers who misses the deadline entirely and never files faces $66,000 in penalties under Section 6721 alone - before the matching $66,000 exposure under Section 6722 for failure to furnish borrower copies.

The "intentional disregard" standard is broader than it sounds. The IRS does not require proof of deliberate evasion. A lender who knew the requirement existed, received IRS notices, and still failed to file can meet the intentional disregard standard. Ignorance of the law is not a defense once a lender has been notified.

Reasonable cause exceptions exist for lenders who can demonstrate that the failure resulted from events beyond their control - natural disasters, system failures by third-party service providers, or similar circumstances. The exception requires documentation and is not guaranteed. Acting promptly after the failure improves the odds of a favorable reasonable cause determination.

1098-VLI Penalty Table (IRC Sections 6721-6722)

Each penalty track (§6721 and §6722) applies independently. Total combined exposure doubles the figures above.

Does the 2025 Transitional Relief Extend Any Deadlines?

No. The 2025 transitional relief period did not extend the January 31 or March 31 deadlines. It reduced penalty exposure for lenders who made good-faith compliance efforts during the first year of Form 1098-VLI requirements - it did not move any dates.

What the transitional relief actually did:

• Reduced penalties for late or incomplete filings made in good faith

• Waived certain penalties for lenders who attempted to comply but had system or data issues

• Did not apply to lenders who made no attempt to file What it did not do:

• Change the January 31 borrower copy deadline

• Change the March 31 IRS eFile deadline

• Protect lenders who simply skipped filing

• Apply to tax year 2026 and beyond The 2025 transitional relief has expired. Starting with tax year 2026, the full penalty structure under IRC Sections 6721 and 6722 applies without accommodation. Lenders who relied on reduced penalties in 2025 as a budgeting assumption for 2026 need to recalculate their compliance risk.

If you failed to file for 2025 and the transitional relief window has passed, you're now in the standard penalty tier framework. Filing late is still better than not filing at all - earlier correction means a lower penalty tier. A 2025 return filed today faces the "after August 1" tier ($330 per return), but that's still lower than the intentional disregard tier that applies once the IRS has identified and notified you of the failure.

1098-VLI Deadline Checklist for Auto Lenders

Use this checklist to confirm your compliance timeline is on track before each filing season:

October - November (tax year in progress):

• Confirm TCC registration is active if filing through IRS IRIS directly

• If using a third-party service, confirm account is set up and service deadlines are documented

• Begin collecting or verifying borrower TINs - send W-9 requests for any missing TINs now

• Verify your loan management system or DMS can export interest-paid-by-calendar-year (not loan-life interest) December (tax year closing):

• Run a preliminary borrower list: all accounts with $600+ in interest received year-to-date

• Reconcile preliminary interest total against general ledger interest income

• Flag any accounts with missing VINs, TINs, or addresses for resolution

• Confirm borrower mailing addresses are current January 1-25:

• Finalize interest paid calculations for all reportable accounts

• Generate Form 1098-VLI for each borrower above the $600 threshold

• Review all forms for accuracy before distribution

• Mail or deliver borrower copies - must be postmarked by January 31 February:

• Prepare IRS submission file in required format

• Test upload/submission through IRIS or submit to third-party service (most services require data by mid-February)

• Address any validation errors or rejected fields before March March 1-25:

• Submit to IRS IRIS electronically (deadline: March 31)

• Confirm acceptance - do not assume submission equals acceptance

• Retain confirmation numbers and submission records

• File paper returns by February 28 if eligible (fewer than 10 returns) After filing:

• Retain copies of all filed forms and underlying data for four years minimum

• Document any corrections filed and the dates they were submitted

• Note any IRS notices received and response deadlines

Frequently Asked Questions

If I mail the borrower copy on January 31, does that count as on time?

Yes. The IRS "furnishing" requirement is satisfied by mailing, not by receipt. A first-class mailing postmarked January 31 meets the deadline even if the borrower receives it in early February. Keep mailing records - a postmark dispute with the IRS is easier to win with dated receipts or a USPS tracking confirmation than without one.

What if a borrower's address is wrong and the copy is returned undeliverable?

An undeliverable copy does not automatically trigger the failure-to-furnish penalty if you made a good-faith effort to obtain the correct address. Document what address you had on file, when the return mail arrived, and any steps you took to locate the correct address. If you subsequently obtain a correct address, resend the form. The IRS looks at reasonable care, not just outcome.

Do the deadlines change if I only have a handful of reportable borrowers?

The January 31 and March 31 deadlines apply regardless of portfolio size. A lender with five reportable borrowers faces the same filing dates as one with five thousand. The only deadline that differs by volume is the paper filing option - lenders with fewer than 10 returns may paper file by February 28 instead of electronically filing by March 31. For most lenders, electronic filing is both required and easier.

Can I file an extension for Form 1098-VLI?

The IRS allows lenders to request a 30-day extension for furnishing recipient (borrower) copies by filing Form 8809 before the January 31 deadline. Extensions are not automatic - they require a showing of need and are granted at the IRS's discretion. No comparable extension exists for the IRS filing deadline itself, though hardship provisions exist in limited circumstances. If you think you'll miss January 31, file Form 8809 early rather than waiting to see if you can make the date.

The January 31 and March 31 dates are fixed points in your compliance calendar - not targets to work toward in January. The lenders who miss them aren't usually disorganized. They're lenders who started data preparation too late and ran out of runway. Building the checklist above into your Q4 process turns deadline management from a January scramble into a November and December routine. Start your 1098-VLI filing setup here before the next filing season opens.