If you paid interest on a qualified student loan, you may be able to deduct the amount on your tax return. This deduction is an adjustment to your income, meaning it does not count as an itemized deduction.
The IRS will issue you a Form 1098-E which is your Student Loan Interest Statement.
In order to claim this deduction, you must have a qualified student loan. A qualified student loan is a loan you took out solely for a higher education. According to the IRS, these expenses must be:
- For you, your spouse, or your dependent (must be eligible students)
- For education provided during an academic period
- Paid or incurred within a reasonable period of time before or after you took out the loan
You can claim the deduction if all of the following apply:
- You paid interest on a qualified student loan during the tax year
- You’re legally obligated to pay interest
- You are not filing as married filing separately
- Your modified adjusted gross income is less than the amount set annually
- You/your spouse cannot be dependents on someone else’s return