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maajohnson
New Member

Can I deduct repayments to Illinois Teachers Retirement system that were previously refunded. I repaid almost 10 years with interest this year?

 
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MarilynG
Expert Alumni

Can I deduct repayments to Illinois Teachers Retirement system that were previously refunded. I repaid almost 10 years with interest this year?

No, you cannot deduct payments or interest to repay a loan from your retirement plan. If you borrowed against your retirement plan and made payments back over the last 10 years, you received a distribution (the loan proceeds) that you were not taxed on.  

The IRS says that the interest from a loan of this type (no matter what the loan proceeds were used for) is also not deductible.

Here's more info from the IRS on the subject of retirement plan loans:

https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-loans

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MarilynG
Expert Alumni

Can I deduct repayments to Illinois Teachers Retirement system that were previously refunded. I repaid almost 10 years with interest this year?

No, you cannot deduct payments or interest to repay a loan from your retirement plan. If you borrowed against your retirement plan and made payments back over the last 10 years, you received a distribution (the loan proceeds) that you were not taxed on.  

The IRS says that the interest from a loan of this type (no matter what the loan proceeds were used for) is also not deductible.

Here's more info from the IRS on the subject of retirement plan loans:

https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-loans

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
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