Should I claim tuition I paid with student loans?

[hirasaleem25]

I'm a full-time grad student, and I paid my tuition with federal student aid (FAFSA) in 2018. I received a Federal Direct Loan Unsubsidized, which means I have to pay it back, with interest, after I've finished school. I got a 1098T form, which was used in federal taxes, but for Massachusetts state taxes, in the Education Expenses section, do I claim that I paid College tuition payments or not? 

[Carl]

I am assuming you are over the age on 23 on Dec 31 of 2018. If not, let us know.
Yes, you will claim your education expenses. But understand that the "tuition and fees" deduction expired in 2017. So if you are the primary borrower on the loan you may not get any education credits if you don't have the "earned" income to claim those credits against.

[hirasaleem25]

Yes, I'm above 23. But what do you mean by earned income exactly ?
Also, I asked the same question yesterday actually but I forgot to mention that it is an unsubsidized direct federal loan, so i posted it again, but i got a response that i cant claim graduate tuition on MA state taxes

[Carl]

Did you have a job in 2018? Were you self-employed in 2018? Earned income is only reported to you on 2 forms. Either a W-2 or a 1099-MISC box 3 or 7.
So if you did not have a job in 2018, or if you were not self-employed and your business produced a taxable profit, then you have no earned income in 2018.
Basically, earned income is income received by you going out and "doing something" on a recurring basis to "earn" that money.

[hirasaleem25]

Yes I did have a job in 2018, I didt get a W2, and I did report that income

[Carl]

Now that I think about it, I really don't think that matters for 2018. Congress did not renew the "tuition and fees" deduction that expired at the end of 2017. So any out of pocket education expenses are just flat out not deductible. Expenses you paid with borrowed money are treated the same as being paid out of your pocket.

[KrisD]

Yes, expenses paid with funds you obtained through a loan are treated as being paid by you. 

Only if the expenses were paid for with tax-free assistance, such as the GI Bill could you not claim them.