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Interest on Forgiven Student Loans

Parallel Fifth — Sat, 01 Feb 2025 21:25:31 GMT

My student loans were forgiven in 2024 under the federal plan. I was on IBR and my payments were $0/month. I received a 1098 E for the student loan interest, but this is not money that I paid. Is it okay to ignore a tax document, or would I be penalized for doing so? What about the implication of including the tax document, but it not being me who paid the interest claimed on it?

Re: Interest on Forgiven Student Loans

Shannon B1 — Sun, 02 Feb 2025 00:28:26 GMT

Yes, it's okay not to enter your 1098-E if you didn't pay any interest on your student loans in 2024.

If you include the 1098-E and the IRS audits you, you'll need to prove you made the interest payments. If you can't, you might have to repay the tax savings and face penalties and interest. Generally, less than 1% of taxpayers are audited each year.