No, you can claim the interest on your return if you are claiming the child as a dependent and a co-signer - thus legally obligated to pay the debt. Go back through the interview and update your answers. If you are claiming them as dependents - they cannot take the deduction on their returns.
How much can I deduct?
- You may deduct the lesser of $2,500 or the amount of interest you actually paid during the year.
- The deduction is gradually reduced and eventually eliminated by phaseout when your modified adjusted gross income (MAGI) amount reaches the annual limit for your filing status.
Qualifications:
You can claim the deduction if all of the following apply:
- You paid interest on a qualified student loan in tax year 2020.
- You or your spouse, if filing jointly, can't be claimed as dependents on someone else's return. (You can take the deduction as a student. If you're a parent making payments on your dependent student’s loan, you can also take the deduction).
- You're legally obligated to pay interest on a qualified student loan.
- Your filing status isn't married filing separately.
- Your MAGI is less than a specified amount, which is set annually.
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