WASHINGTON— America’s Credit Unions is urging the Treasury Department and Internal Revenue Service to clarify several tax provisions in H.R. 1 — the sweeping “One Big Beautiful Bill” — saying unanswered questions could hinder credit unions’ ability to implement new consumer benefits contained in the law.
In a letter sent to Treasury Secretary Scott Bessent, who is also serving as acting IRS commissioner, the trade group said credit unions and state leagues have raised concerns about ambiguities in the law’s loan-interest deduction and cross-border remittance tax provisions. America’s Credit Unions said the letter was drafted in coordination with leagues to ensure all outstanding issues were included.
Temporary Deduction
As the trade group noted, H.R. 1 creates a temporary federal income-tax deduction for interest paid on certain passenger-vehicle loans from 2025 through 2028 and establishes a new excise tax on certain cross-border remittances, while exempting transfers funded directly from deposit accounts. Both provisions carry new compliance and reporting burdens for credit unions, the group said.
The IRS has already issued one year of transition relief for vehicle-loan interest reporting, which America’s Credit Unions called a positive step. But the trade group said institutions still need guidance on key issues, including:
- Who is responsible for determining whether a vehicle loan qualifies as a “specified passenger vehicle loan” eligible for the deduction
- Which loans must be reported on IRS information returns and provided to borrowers in annual statements
- How to treat refinanced loans that include add-ons such as GAP coverage, warranties, fees or cash-out amounts
- Whether lenders may satisfy reporting rules by reporting gross interest, and whether patronage dividends can continue to be treated as profit distributions rather than loan-level interest adjustments.
Clarity Sought on Timing
The organization also asked the IRS to clarify timing issues related to model years, the distinction between new and existing loans, handling of refinances and which calendar year should be used when reporting outstanding principal balances.
On the remittance-tax provision, America’s Credit Unions said it supports the exemption for account-based transfers but needs practical guidance — especially in scenarios where a member deposits cash and then immediately sends a transfer from the same account.
‘Plain Language View Urged’
The group urged Treasury and the IRS to adopt “the plain-language view that any transfer paid from the sender’s account at the institution is exempt from the excise tax, regardless of how recently the funds were deposited,” and asked regulators to formally confirm that interpretation.
The full letter can be found here.
