Student Loan Interest Deduction
You may take this deduction only if all four of the following apply.
You paid interest in the tax year on a qualified student loan (see below).
Your filing status is any status except married filing separately.
Your modified adjusted gross income (AGI) is less than a specified amount which is set annually
You, or your spouse if filing jointly, are not claimed as a dependent on someone's (such as your parent's) tax return.
If you meet the above requirements and enter student loan interest, we will figure the credit for you. Please note that there is a phase-out of this credit based on your Modified AGI.
Qualified Student Loan
A qualified student loan is any loan you took out to pay the qualified higer education expenses for any of the following individuals:
- Yourself or your spouse
- Any person who was your dependent when the loan was taken out
- Any person you could have claimed as a depended for the year the loan was taken out except that:
a. The person filed a joint return,
b. The person had gross income that was equal to or more than the exemption amount for that year, or
c. You, or your spouse if filing jointly, could be claimed as a dependent on someone else's return
The person for whom the expenses were paid must have been an eligible student. However, a loan is not a qualified loan if (a) any of the proceeds were used for other purposes, or (b) the loan was from either a related person or a person who borrowed the proceeds under a qualified employer plan or a contract purchased under such a plan.
Qualified Higher Education Expenses
Qualified higher education expenses generally include tuition, fees, room and board, and related expenses such as books and supplies. The expenses must be for education in a degree, certificate, or similar program at an eligible educational institution.
An eligible educational institution includes most colleges, universities, and certain vocational schools. You must reduce the expenses by the following benefits.
Employer-provided educational assistance benefits that are not included in box 1 of your W-2 form(s).
Excludable U.S. series EE and I savings bond interest from Form 8815.
Nontaxable qualified state tuition program earnings.
Nontaxable earnings from Coverdell Education Savings Accounts.
Any scholarship, educational assistance allowance, or other payment (but not gifts, inheritances, etc.) excluded from income. For more details on these expenses, see Pub. 970.
An eligible student is a person who:
Was enrolled in a degree, certificate, or other program (including a program of study abroad that was approved for credit by the institution at which the student was enrolled) leading to a recognized educational credential at an eligible educational institution and
Carried at least half the normal full-time workload for the course of study he or she was pursuing.