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New Member
posted May 31, 2019 8:09:27 PM

Can I deduct points paid on a purchase that were paid by my employer due to relocation? It was included in my w-2 as taxable and not grossed up.

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1 Best answer
Level 15
May 31, 2019 8:09:29 PM

Yes, you can deduct the points paid on your return due the fact that they were added to your W-2.  Had they just been reimbursed and NOT added to your wages it would not be deductible.  

Points are deductible in the Mortgage interest area.

To enter mortgage interest

  • Click on Federal Taxes (Personal using Home and Business)
  • Click on Deductions and Credits 
  • Click on I'll choose what I work on (if shown)
  • Under Your Home
  • On Mortgage Interest, click on the start or update button

8 Replies
Level 15
May 31, 2019 8:09:29 PM

Yes, you can deduct the points paid on your return due the fact that they were added to your W-2.  Had they just been reimbursed and NOT added to your wages it would not be deductible.  

Points are deductible in the Mortgage interest area.

To enter mortgage interest

  • Click on Federal Taxes (Personal using Home and Business)
  • Click on Deductions and Credits 
  • Click on I'll choose what I work on (if shown)
  • Under Your Home
  • On Mortgage Interest, click on the start or update button

New Member
May 31, 2019 8:09:31 PM

What about the sales expenses on the sale of the house that the relocation company paid at closing,  The amount is on my w-2 and has been grossed up.

Level 15
May 31, 2019 8:09:31 PM
Returning Member
Jul 22, 2019 6:58:41 PM

Does anyone have a reference to the irs tax code for this answer. I am
In a similar boat and need to have a written explaining included reference to tax code. I can’t seem to find anything on this specific issue.

Level 15
Jul 23, 2019 12:00:51 PM

There is really nothing to explain.  The reason that the employer paid you some amount above your regular wages (a fringe benefit, supplemental wages) and included it in the total wages shown on your W-2 is irrelevant.  The employer simply paid you some total amount of reportable wages and you yourself paid some amount of points, two independent entries on your tax return.  The tax code requires that your wages be included in income and a separate section of the tax code allows a deduction for points paid.  The two are unrelated.

Returning Member
Jul 23, 2019 1:11:23 PM

Either way, I am just trying to find a reference to IRS support stating that I CAN INDEED take the deduction for the points paid, even though they were paid by my employer. According to the others on this thread, they are saying that I can deduct the points. I just wanted to reference the tax code when explaining my position to the mortgage company and if necessary the IRS. 

Level 15
Jul 23, 2019 2:10:05 PM

Because the money was included in your wages in box 1 of your W-2, the points were paid by you, not by your employer.

Returning Member
Jul 23, 2019 5:22:28 PM

Thank you. I appreciate your help!