Can I use the 1098-E form I received for my student Loans which was paid through Fed. Consolidation in 2016, despite that I made No payment to the loan in 2016 ?

[ashyblue85]

I consolidated all my Navient Fed. Student Loans in 2016 to FedLoans. And now have received a 1098E from Navient. This is while I payed No payment on my loans in 2016 since I was in a IDR repayment program which had a 0 dollar monthly payment amount. Fedloans through consolidation paid my Navient student loans in full, in other words my loans with Navients were paid off and closed ( All principal , capitalized interest , etc ) were paid off. So since I made no payment myself, will I still be able to use the interest reported in 1098-E ??

Lastly , If my brother claims me as dependent,  can he claims the interest on my 1098-E ? ( Given I was the sole person responsible for the Loan & Not him ) .
Thanks

[MargaretL · Accepted solution]

Yes, you can report the student loan interest on Form 198-E.  When you consolidated - you paid off the accrued interest on the loans, and this portion is deductible. 

If your brother claims you as a dependent, he cannot claim the student loan interest, unless he paid it, and he was legally obligated to pay.

You can only deduct student loan interest if all of the following apply:

• You paid interest on a qualified student loan in tax year 2015
• You are legally obligated to pay interest on a qualified student loan
• Your filing status is not married filing separately
• Your MAGI is less than a specified amount which is set annually, and
• You or your spouse, if filing jointly, cannot be claimed as dependents on someone else's return

[ashyblue85]

Thanks for the response , please note I paid no interest , it was  paid through consolidation which I initiated , so it's okay for me still claim the interest in 1098E ??? , and if the interest in box one is way over 2500 allowed for interest deduction , then can I use the rest of the Not used interest deduction which could not be used for this tax return year on the next one ?

[MargaretL]

Yes, it is ok to use 1098-E; consolidation means you paid, even though it's done through consolidation.  Unfortunately, you are not allowed (IRS rules) to carryover an unused amount to the next year...