Who can write off interest on 1098-e?

[3monkeys]

Our son has a student loan in his name with us as co-signers.  He is currently living at home while still attending school.  He is not currently working and we are claiming him as a dependent since we are providing for him.  We have been making payments on his loan and received a 1098-e.  Can we, his parents who are claiming him as a dependent, write off the student loan interest?

[mlwgreer]

This recommended answer contradicts the On Demand Help Guidance answer when entering the deduction. Here is the that answer.  Which is the correct answer?

What if I paid interest for someone else?

To get a student loan interest deduction on your taxes, the student loan has to actually be in your name.

If the loan is in your child's name, then you can't deduct that interest on your own tax return even if your child is your dependent on your tax return. Your child can deduct that interest on their tax return.

[spacemanspiff]

Bump. I agree, this contradicts. Can a Turbo Tax Support Agent please either confirm that the On Demand Help Guidance answer needs to be corrected (I think this Answer here makes more sense), or please explain how this answer is wrong, so we know and so others won't follow it. I had already saved this answer off in my tax file for future reference, and was moving forward based on it's advice. Luckily, I just happened to come to the larger page and see the comment.

I flagged as "Other" temporarily to draw attention to this potentially misleading information. I know that I can unflag later.

[SherekaB · Accepted solution]

Yes as long as he is under age 24 and a full time student. All  of his  education information such as his 1098-T would go on your return. You are eligible to claim the interest on the 1098-E since you are a co-signer and have been making the payments.

How to enter 1098-E:

1. Select Federal Taxes (Personal in the Home & Business edition).
   
2. Select Deductions and Credits, and in the next screen, click on I'll choose what I work on.
   
3. Scroll down the Your Deductions and Credits screen until you see the Education group.
4. Click on the Start/Update button next to the Student Loan Interest Paid category.

[mlwgreer]

This recommended answer contradicts the On Demand Help Guidance answer when entering the deduction. Here is that answer.  Which is the correct answer?

What if I paid interest for someone else?

To get a student loan interest deduction on your taxes, the student loan has to actually be in your name.

If the loan is in your child's name, then you can't deduct that interest on your own tax return even if your child is your dependent on your tax return. Your child can deduct that interest on their tax return.

[HollyP]

The on-demand guidance is correct, but please allow me to elaborate, as there really is no contradiction presented here. 

First, it states, "To get a student loan interest deduction on your taxes, the student loan has to actually be in your name." This means you must either be the signer or co-signer of the loan to qualify. Therefore, if you are the co-signers, then the student loan is in your name and you are considered legally obligated to pay the loan.

Next, it states, "If the loan is in your child's name, then you can't deduct that interest on your own tax return even if your child is your dependent on your tax return. Your child can deduct that interest on their tax return." This really means if the loan is ONLY in your child's name, then you can't deduct the interest even if you claim the child as a dependent.

Please see the FAQ below for more info. https://ttlc.intuit.com/replies/3302319

Also, since you indicated this was a point of confusion I will report it for further review and consideration. We appreciate this valuable feedback. 

[spacemanspiff]

Holly, this response completely clears it up, thank you so much for that.  To summarize, and please correct me if I'm wrong:
"To get a student loan interest deduction on your taxes, the student loan has to actually be in your name, either as the signer or the co-signer of the loan."
and
"If the loan is in your child's name ONLY, meaning you are not even a co-signer on the loan, then you can't deduct that interest on your own tax return even if your child is your dependent on your tax return. Your child can deduct that interest on their tax return."

This means that when TurboTax asks "Enter the information from the 1098-E here. Whose name was the student loan in?" it actually means for you to select your own name if you are a co-signer, even if your name is nowhere to be found. I would think that part is most important to be clarified, not the on-demand guidance. It should read something like:
"Enter the information from the 1098-E here. Whose name was the student loan in? (If you were a co-signer on the loan, your name will not appear on the 1098-E, but you should still select your name here, if you are taking the deduction instead of the primary signer)"

Phew... all of this is a HUGE change from the language on TurboTax site currently. So I thank you for clearing that up in basically a 180 degree direction for us, but it's kind of like saying you "cleared it up" that the color is really black, when TurboTax first said "white." So I found your claim that "there really is no contradiction presented here" to be both misleading and diminishing of mlwgreer's point, and mine.

We are told we are entering info from the 1098-E, not from our loan documents, and my loan company confirmed that the 1098-E will NEVER have the co-signers name on it. At this point, I find it hard to believe that anyone would have ever acted with your interpretation of "in your name," with our co-signer names nowhere to be found, and never to be found, on a 1098-E. Regardless, if a co-signer name can EVER be absent from the 1098-E you've told us to look at, then your instructions currently are completely misleading, 180 degrees in the wrong direction.

Again, I appreciate the answer, but it is spoiled by the intimation that WE are the ones who were somehow wrong here or couldn't quite grasp a concept, not TurboTax, when any 5th grader could read this and know that exactly the opposite is true.

In my 8-10 hours of reading TurboTax answers here (just this year alone), I find that that permeates just about every single response, almost without exception. I don't know if this is a legal technique, or company culture, but I take umbrage with the claim that you could show this to 100 non-tax experts and NOT have 90 of them think they can't select their own name below. It's clear you don't invest in any of that kind of UX testing. In fact, if they are honest, I think 80 tax experts would agree as well.

Tax season is almost over. I wish you well and thank you for moving the ball forward.