PA enacted a student loan interest deduction for 2025 with no income limit (Act 56). TurboTax is omitting it for filers above the federal phase-out threshold.

[gatesy323]

Pennsylvania's new deduction (up to $2,500, reported on Schedule O) is independent of the federal deduction — PA has no income phase-out. But when TurboTax zeros out the federal deduction due to income, it silently skips Schedule O on the PA return entirely, with no warning to the taxpayer. PA-40 Line 10 remains blank. The fix should be straightforward: the PA deduction needs to be evaluated independently of the federal result. This affects any PA filer above the ~$195K MFJ federal threshold who paid student loan interest in 2025. Has anyone found a workaround short of manually overriding the PA forms?

[Vanessa A]

I would like to take a deeper look at this. However, I need a diagnostic file which is a copy of your tax return that has all of your personal information removed. You can send one to us by following the directions below:

TurboTax Online:

1. Sign into your online account.
2. Locate the Tax Tools on the left-hand side of the screen.
3. A drop-down will appear. Select Tools
4. On the pop-up screen, click on “Share my file with agent.”
5. This will generate a message that a diagnostic file gets sanitized and transmitted to us.
6. Please provide the Token Number that was generated in the response.

TurboTax Desktop/Download Versions:

1. Open your return.
2. Click the Online tab in the black bar across the top of TurboTax and select “Send Tax File to Agent” *
3. This will generate a message that a diagnostic copy will be created.  Click on OK and the tax file will be sanitized and transmitted to us.
4. Please provide the Token Number  (including the dash) that was generated in the response.

*(If using a MAC, go to the menu at the top of the screen, select Help, then, “Send Tax File to Agent”)

[gatesy323]

Unfortunately, I've already submitted my return and so I don't see an option to transmit to you.

[CloudLonG]

Based on PA Sch O instruction, PA Student Loan Interest Deduction needs to be allowed for federal income tax purposes first

https://www.pa.gov/content/dam/copapwp-pagov/en/revenue/documents/formsandpublications/formsforindiv...