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richa3
Level 2
December 13, 2021
Question

Amend tax return for student loan interest

  • December 13, 2021
  • 4 replies
  • 49 views

I got my student loan discharged and was reimbursed for all the payments I made to my student loan. Since 2016, I have claimed student loan interest on my tax returns. Do I need to amend my previous tax returns since I was paid back?

    4 replies

    Hal_Al
    Level 15
    Hal_AlLevel 15
    Level 15
    December 13, 2021

    There are tax consequences for your situation, but filing amended returns is not the way to handle it.

     

    You have two pieces of income: 1. the reimbursement of interest deductions claimed in previous years and 2. forgiven loan money. 

     

    Enter the two items separately, in TurboTax (TT).  They both end up on line 8 of Schedule 1. 

     

    You must declare the interest reimbursement,  as income for the year you received it.  

    In TurboTax (TT), enter at:
    - Federal Taxes tab (Personal in  Home & Business)

     - Wages & Income

    Scroll down to:

    -Less Common  Income

          -Misc Income, 1099-A, 1099-C

           - On the next screen, choose – Reimbursed Deductions from a prior year

             -On the next screen, choose Other Itemized Deductions (even though technically it was not an "itemized deduction")

     

    You do not have to declare the loan forgiveness as income, unless you receive a form 1099-C for the amount forgiven. 

    In TurboTax (TT), enter at:
    - Federal Taxes tab (Personal in  Home & Business)

     - Wages & Income

    Scroll down to:

    -Less Common Income

          -Misc Income, 1099-A, 1099-C

           - On the next screen, choose – Cancellation of Debt (form 1099-C).  

     

      richa3Author
      Level 2
      December 13, 2021

      Will I get something in the mail saying how much interest I was reimbursed?

      fanfare
      fanfare
      Level 15
      December 14, 2021

      did you even get your interest back ??

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