So if I pay interest on my child's student loan I can't take it on my taxes?

[HollyP · Accepted solution]

Yes, unfortunately, if the child is not a dependent on your tax return, then you cannot claim the student loan interest that you paid.

If the child is a dependent on your tax return, you must also be legally obligated to pay the loan in order to deduct it. So, if the loan is in your child's name, then you can't deduct the interest even if the child is your dependent.

The only way you can report student loan interest as a parent is if you are claiming the child as a dependent and you are legally responsible for the loan, meaning that you are the signer or co-signer.

[jddoyles]

Thank you!

[jplacentino]

According to IRS Topic Number 456 - as long as you are legally obligated to repay the loan AND the loan was for a person "who was your dependent when you took the loan" you can then deduct - assuming you meet the other requirements, not mentioned here because I just want to address the dependency status.  So it does not appear that they would have to currently be your dependent as long as they WERE when the loan was taken.  You may not be shown on the 1098 but still be legally required to pay as a Co-Signor.

[jplacentino]

According to IRS Topic Number 456 - as long as you are legally obligated to repay the loan AND the loan was for a person "who was your dependent when you took the loan" you can then deduct - assuming you meet the other requirements, not mentioned here because I just want to address the dependency status.  So it does not appear that they would have to currently be your dependent as long as they WERE when the loan was taken.  You may not be shown on the 1098 but still be legally required to pay as a Co-Signor.

[jmbrooks100]

Continuing on this topic.  I have two daughters, both are dependents on my tax return.  They go to a private high school and I needed to take a loan out for the tuition.  The loan is in my name.  Would this qualify as a deduction for the interest expense for me?

[macuser_22]

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@jmbrooks100 wrote:

Continuing on this topic.  I have two daughters, both are dependents on my tax return.  They go to a private high school and I needed to take a loan out for the tuition.  The loan is in my name.  Would this qualify as a deduction for the interest expense for me?

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No.  That applies only to higher (college level) education.

[brulecap]

I was wondering if interest on a student loan is deductible on my children, still paying those student loans even after they grow up and become independent and I can no longer claim them as a dependent. Goggle led me to this topic... 

The answer is yes, deducting the interest is appropriate as long as the student was a dependent when the loan was taken out. The answer at the top is incorrect, current dependent status is immaterial.

Per IRS Topic Number 456:

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

• You paid interest on a qualified student loan in tax year 2019;
• 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.

A qualified student loan is a loan you took out solely to pay qualified higher education expenses that were:

• For you, your spouse, or a person who was your dependent when you took out the loan;
• For education provided during an academic period for an eligible student; and
• Paid or incurred within a reasonable period of time before or after you took out the loan

[veritasgrp]

deducting the interest is appropriate as long as the student was a dependent when the loan was taken out.

Since my child is no longer a dependent, how/where on my tax form do I claim this interest? 

On the return it gives me a drop down box of my dependents but that one is no-longer listed. 

[Hal_Al]

Deducting the interest is appropriate as long as the student was a dependent when the loan was taken out and you are legally obligated to pay it (loan was in your name or you were a co-signer).

You must be in the wrong place (1099-Q instead of 1098-E???). There is no drop down box of dependents at student loan interest.

In TurboTax (TT), enter at:

Federal Taxes Tab (Personal for H&B version)

Deductions & Credits

-Scroll down to:

--Education

  -Student Loan Interest paid (form 1098-E) 

You're only asked for the loan company name and amount of interest paid

[Techzn]

Thank you.

I had figured it out. Unfortunately, we just don't qualify for it

[AR1806]

It says I "can" add if I cosigned the loan. But the first question "Whose name is on this 1098-E?". My son's name is the name because I cosigned. Do I say "yes" since I cosigned?

[ThomasM125]

You need to answer the questions in TurboTax truthfully in order to adhere to their accuracy guarantee and to insure that your tax return is completed accuratly. When asked for the name on the 1098-T, you should enter the name as it is stated there.

If you look on the screen in TurboTax where you enter the interest, you will see questions highlighted in blue that say What if I paid Interest for someone else? When you click on that box, you will see this explanation that indicates that TurboTax will not guarantee the allowability of the deduction unless  the loan is in your name: @AR1806

@AR1806 {edited 2/12/23 at 7:28 AM PST)  

[Hal_Al]

I don't get that question ("Whose name is on this 1098-E?") in my desktop Deluxe.  It only asks who the lender (loan company) is.