You can only deduct the interest on the HELOC if the loan proceeds were used to buy, build, remodel, or substantially improve the home. Don't include any amount of principal that you have not or will not use to improve the home. If you borrowed 100K and only used 50K to improve the home, you can only deduct interest on 50K. If you are in the process of making improvements, include those amounts, but any interest on the principal not used to improve the home has to be excluded.
If you’ve ever used part of this loan to pay for things other than this home, you cannot deduct the interest from that amount of the loan, even if the transaction didn’t take place this year. See HELOC Mortgage.
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