topic Will I be able to deduct VA funding fee for home I will purchase in 2021. in Deductions & credits

Will I be able to deduct VA funding fee for home I will purchase in 2021.

melgalovich — Wed, 30 Dec 2020 13:34:42 GMT

Re: Will I be able to deduct VA funding fee for home I will purchase in 2021.

Opus 17 — Wed, 30 Dec 2020 14:31:00 GMT

The VA funding fee is considered a form of mortgage insurance premium. As far as I know, the MIP deduction has not been reinstated for 2020 or 2021. In the past, it has frequently been reinstated by Congress at the last minute, so I don’t think I should make any prediction one way or the other. There is also an income limit; if your income is more than $100,000 ($50,000 if filing married filing separately) the deduction begins to phase out, and is eliminated if your income is more than $109,000 ($54,500 if married filing separately).

Re: Will I be able to deduct VA funding fee for home I will purchase in 2021.

VictoriaD75 — Wed, 30 Dec 2020 21:16:55 GMT

As @Opus17 stated, the deduction originally expired after tax year 2019. But... Great news! The deduction had a one-year extension in the recent omnibus and coronavirus relief bill. However, that is for tax year 2020. If you are purchasing the home and paying the fee in 2021, it is unknown if the deduction will be extended into tax year 2021.

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