Previous Page: Publication 970 - Tax Benefits for Education - Student Loan Interest Deduction Next Page: Publication 970 - Tax Benefits for Education - Who Can Claim a Dependent's Expenses Use   to find additional instances of index items.

Taxmap/pubs/p970-020.htm#TXMP040f7cd9 Can You Claim the Deduction

Deduction

Generally, you can claim the deduction if all three of the following requirements are met.

1. Your filing status is any filing status except married filing separately.
2. No one else is claiming an exemption for you on his or her tax return.
3. You paid interest on a qualified student loan.

Taxmap/pubs/p970-020.htm#TXMP74305edd Claiming an exemption for you.

Another taxpayer is claiming an exemption for you if he or she lists your name and other required information on his or her Form 1040 (or Form 1040A), line 6c.

Taxmap/pubs/p970-020.htm#TXMP004e2d25
Example.

During 2004, Josh paid $600 interest on his qualified student loan. Only he is legally obligated to make the payments. No one claims an exemption for Josh for 2004. Assuming all other requirements are met, Josh can deduct the $600 of interest he paid on his 2004 Form 1040 or 1040A.

Taxmap/pubs/p970-020.htm#TXMP6f3bbc46 Expenses paid by others.

If you are the person legally obligated to make interest payments and someone else makes a payment of interest on your behalf, you are treated as receiving the payments from the other person and, in turn, paying the interest.

Taxmap/pubs/p970-020.htm#TXMP41561ce0
Example 1.

Darla obtained a qualified student loan to attend college. After Darla's graduation from college, she worked as an intern for a nonprofit organization. As part of the internship program, the nonprofit organization made an interest payment on behalf of Darla. This payment was treated as additional compensation and reported in box 1 of her Form W-2. Assuming all other qualifications are met, Darla can deduct this payment of interest on her tax return.

Taxmap/pubs/p970-020.htm#TXMP03c31b46
Example 2.

Ethan obtained a qualified student loan to attend college. After graduating from college, the first monthly payment on his loan was due in December. As a gift, Ethan's mother made this payment for him. No one is claiming a dependency exemption for Ethan on his or her tax return. Assuming all other qualifications are met, Ethan can deduct this payment of interest on his tax return.

Taxmap/pubs/p970-020.htm#TXMP120de5da No Double Benefit Allowed

You cannot deduct as interest on a student loan any amount that is an allowable deduction under any other provision of the tax law (for example, as home mortgage interest).

Previous Page:  Publication 970 - Tax Benefits for Education - Student Loan Interest Deduction Next Page:  Publication 970 - Tax Benefits for Education - Who Can Claim a Dependent's Expenses Use     to find additional instances of index items.