Two names are on your car loan, but the lender sent Form 1098-VLI to only one of you. So which of you can claim the car loan interest deduction, and how much? Some borrowers put the whole total on one return. Others assume the person without a form can claim nothing, or split it in half. No IRS rule backs any of those moves.
Under the final regulations, interest can count for you only if you took on the debt when the car was bought. A caution on the lender's form also limits each of you to interest you paid from your own money, with nobody paying you back. The one form shows the loan's total interest, and no IRS source says how to divide it.
Below, VehicleLoanInterest.com explains why only one of you got the form and how much each of you may claim. We also cover co-signers, parents, spouses and refinancing, and when to see a tax professional.
Why only one of you got Form 1098-VLI
The form goes to the payer of record. That is the borrower your lender's books list as the principal, or main, borrower. If the books don't say which of you that is, the lender has to pick one, according to the instructions for Form 1098-VLI.
The same instructions say when a loan has more than one borrower, the lender prepares one form, only for the payer of record, showing the total interest it received. The final regulations confirm that with co-borrowers, only the payer of record must be sent a statement, so the lender has no duty to send one to the other borrower. Getting no form does not, by itself, mean you can't claim any interest.
How much of the car loan interest deduction each of you can claim
Getting the form doesn't mean you can claim the whole total, either. Copy B, the borrower's copy of Form 1098-VLI, carries a caution. "Generally, you may only deduct interest to the extent it was incurred by you, actually paid by you, and not reimbursed by another person."
The final regulations also require the lender's statement to tell the payer of record they may deduct the interest only to the extent they took on the loan and actually paid it. So even the person with the form may not be able to deduct the full amount.
Taken together, those rules give each of you a ceiling. You can claim no more than the interest on debt you took on and paid from your own funds, with no one paying you back. No IRS source, and nothing in the law itself, sets a rule for dividing interest between borrowers on the same loan. So a half-and-half split is not an IRS rule, and neither is any split the two of you agree on.
In this hypothetical example, a car loan carries $3,000 of interest in one year. Maria is the payer of record and paid $1,800 from her own account, and Daniel paid $1,200 from his own. The lender sends one Form 1098-VLI, to Maria, showing $3,000, and Daniel gets no form.
Assume both signed the loan when they bought the car, and the car is new, assembled in the United States and bought for personal use. Each files their own return with modified adjusted gross income (MAGI) under $100,000, and nobody paid either of them back.
On those facts, Maria can claim no more than $1,800 and Daniel no more than $1,200, or $3,000 in all. Neither amount comes near the $10,000 cap per return, and with MAGI under $100,000, neither is reduced. The example shows each person's ceiling, not an IRS formula for splitting interest.
When one of you co-signed the loan
If one of you signed as a co-signer, the written rules run out. The IRS guidance for this deduction does not address co-signers, and none of its sources uses the words "co-signer" or "guarantor." That silence covers a parent who co-signed for a child, too. Take this question to a tax professional before either of you claims the interest.
When a parent and a child share the car
The child is the borrower and a parent helps pay
A parent can help pay a child's car loan without being on it. In that case the form goes to the child, and the form's instructions say interest someone else pays, such as a parent, is reported as if the payer of record paid it. So the child's form can include the parent's payments.
Those payments don't make the loan count for the parent, who did not take on the debt. The Copy B caution also limits the child to interest the child actually paid and was not paid back for. If the parent's help was a gift toward the payments, ask a tax professional how that money is treated.
The parent is the borrower and the child drives
With the child driving, personal use is the first question. It is judged when the loan is taken out, and the buyer must then expect personal use more than 50 percent of the time. Use by the buyer, the buyer's spouse or a related individual counts toward it.
An example in the final regulations shows the test can still be met. In it, a parent borrows to buy a car, expecting only the parent's child to use it for personal purposes, and the parent is treated as having bought it for personal use. The example applies to a child related to the parent under section 152(c)(2) or (d)(2) of the tax code. The child, though, did not take on the debt, so the loan does not count for the child.
How many $10,000 caps apply
The return itself sets limits too. The deduction is capped at $10,000 per federal tax return, and filing status doesn't decide whether you can claim it. On any return but a joint return, head of household included, the deduction starts to shrink once MAGI goes above $100,000.
If you are not married to each other, each of you files your own return. So each return has its own $10,000 cap and its own $100,000 starting point for the reduction. Two caps don't raise the ceiling for either of you, though.
If you are married and file a joint return, you share one $10,000 cap, not two, and the reduction starts once MAGI goes above $200,000. Our guide to the rules for married couples covers joint and separate returns.
Why the start of the loan matters
The debt rule looks back to the start of the loan. Interest can count for a person only if that person originally took on the debt, unless they became a borrower because a previous borrower died. If the original borrower stops being a borrower and someone else takes over the loan, it is not a qualifying loan for whoever took it over, apart from that death exception.
A refinance follows the same logic. A borrower added when the loan is refinanced cannot deduct the interest on it, though the original borrower or borrowers still can. Whether the refinanced loan itself still qualifies, whoever was added or removed, depends on the refinance rules.
A qualifying vehicle also has to meet an original use requirement. Sometimes two or more people buy a new car together, and one of them is the first person to take delivery after it is sold, registered or titled. The final regulations count each buyer as that first person. In that case, the requirement is met for each of you.
What the borrower with no form needs
To claim the deduction without a form, you need the interest you paid and the vehicle identification number (VIN). The 2025 Form 1040 instructions say that for the 2025 return, the deduction is claimed on Schedule 1-A, Part IV, whether you take the standard deduction or itemize. The return must include the VIN of each vehicle the interest is for.
The interest takes more work, since you have no form. Our guide on what to do if your lender didn't send it shows how to rebuild an interest total. We also suggest each of you keep a record of which account each payment came from.
What your lender has to do
Your lender's reporting obligation runs to the payer of record, the principal borrower on its books or the one it picks when the books don't say. It prepares one Form 1098-VLI for that borrower showing all the interest it received, including payments someone else made.
So the form records what your lender received, not which of you may take the car loan interest deduction. Our post on a lender's filing duty covers joint and co-signed loans, and our box-by-box guide explains each box on the form.
Your next step
Whether the deduction applies when two people share a loan depends on the car, the loan and each of your returns. This article explains the rules, but it is not tax advice. Take your own situation to a tax professional before either of you files.
Before you meet with one, read the full deduction rules for tax years 2025 through 2028 in our overview. Then bring the form, your payment records and the VIN to that conversation.
