Job’s student loan contrib benefit fully covered mo. payments all year. Can 1098-E interest still be deducted from total income given I wasn’t technically the one paying?

[jasonmshearer]

My employer made payments toward my student loan debt for the entire 2018 calendar year via a third-party servicer. Each monthly payment was enough to cover the interest in full, and some of the principal too.  So grateful for such an amazing employee benefit!

My concern pertains to the interest listed on the 1098-E.  Can/should I claim all of that interest paid so as to lower my taxable income for the year given that I wasn’t the one actually making those payments?  Do said payments still count as being made by me even though they were technically made by my employer on my behalf?

Not sure if this additional info will be beneficial or not but I believe my employer has always added the student loan payment amount to one of my two biweekly paychecks/statements each month, then subtracted it back out the next pay period when the actual payment has been made.

In the end I just want to make sure I’m not claiming interest paid by some one/thing (i.e. a business entity) other than myself.

[DawnC0 · Accepted solution]

Yes, you can and should deduct your student loan interest even if it was paid by your employer.  See qualifications below.  

How much can I deduct?

• You may deduct the lesser of $2,500 or the amount of interest you actually paid during the year.
• The deduction is gradually reduced and eventually eliminated by phaseout when your modified adjusted gross income (MAGI) amount reaches the annual limit for your filing status.

Qualifications:

You can claim the deduction if all of the following apply:

• You (or your employer) paid interest on a qualified student loan in tax year 2018;
• You can take the deduction as a student, or as a parent making payments on your dependent student’s loan. However, you or your spouse, if filing jointly, can't be claimed as dependents on someone else's return.
• You're legally obligated to pay interest on a qualified student loan;
• Your filing status isn't married filing separately; and
• Your MAGI is less than a specified amount, which is set annually.