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New Member
posted Jun 4, 2019 2:14:37 PM

Why did my federal refund decrease so much when I put in the student loan interest I paid?

My federal refund was at a couple hundred dollars and then when I put in the student loan interest that I paid my AZ refund went up, but my federal refund went down to $52. Why is that?

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1 Best answer
New Member
Jun 4, 2019 2:14:39 PM

Only $2,500 of student loan interest can be reported on a federal tax return. 

The student loan interest is entered as an Adjustment to Income, not a tax refund or credit. 

An adjustment to income reduces the Adjusted Gross Income thereby reducing the amount of taxable income.


1 Replies
New Member
Jun 4, 2019 2:14:39 PM

Only $2,500 of student loan interest can be reported on a federal tax return. 

The student loan interest is entered as an Adjustment to Income, not a tax refund or credit. 

An adjustment to income reduces the Adjusted Gross Income thereby reducing the amount of taxable income.