Can I include the amount listed on the 1098-E (Student loan interest received by lender), as a deduction on my return?

[donfaulkner]

This is regarding the Student Loan Payment Deduction: I am the co-signer on my daughter's private student loan. I have made her loan payments during 2017. Can I include the amount listed on the 1098-E (Student loan interest received by lender), as a deduction on my return? Are there any circumstances under which this is considered permissible?

[AnthonyC · Accepted solution]

Yes, possibly.  If she was a dependent when you took out the loan, and you are also legally liable for repayment (i.e. co-signor), and you actually paid the interest, then you are allowed to take the deduction for the interest paid.

There are also a few other overall rules that must be satisfied. You can claim the deduction if all of the following apply:

• You paid interest on a qualified student loan in the tax year 2017;
• You're legally obligated to pay interest on a qualified student loan;
• Your filing status isn't married filing separately;
• Your MAGI is less than a specified amount which is set annually; and
• You or your spouse, if filing jointly, can't be claimed as dependents on someone else's return.

https://www.irs.gov/taxtopics/tc456.html

Now, when you go to enter this information, make sure you select "You" when it asks you about the loan.  The question in the 1098E section is not asking whose name is on the form, it is asking whose name is on the loan (which as a co-signor would also be you).  Don't select "someone else" or your dependent name or it will disallow the deduction.