Should I check the box for "We paid points when we refinanced..." even though the points were on our 2022 mortgage but not claimed on 2022 tax return?

[mickee541]

I don't see an option for the points we paid on our home mortgage.

[DianeW777]

No.  If you did qualify in 2022, when the points were paid you would need to amend that return.  The qualifications are shown below. You are allowed to claim points in the year of the original loan. 

• Amending a prior-year return

Or If you do not meet the tests below, then they are deductible ratably over the life of the loan.

Since this is a refinanced mortgage a calculation of the loan origination fee (points) will need to take place to determine the amount you are allowed each year. Any of the loan proceeds that were refinanced from the original lender must be divided by the number of months or term of the loan.  This amount can be deducted each year as part of your mortgage interest deduction. 

Deduction Allowed in Year Paid - IRS Publication 936

You can fully deduct points in the year paid if you meet all the following tests. (You can use Figure B as a quick guide to see whether your points are fully deductible in the year paid.) 

1. Your loan is secured by your main home. (Your main home is the one you ordinarily live in most of the time.) 
2. Paying points is an established business practice in the area where the loan was made. 
3. The points paid weren't more than the points generally charged in that area. 
4. You use the cash method of accounting. This means you report income in the year you receive it and deduct expenses in the year you pay them. Most individuals use this method. 
5. The points weren't paid in place of amounts that are ordinarily stated separately on the settlement statement, such as appraisal fees, inspection fees, title fees, attorney fees, and property taxes. 
6. The funds you provided at or before closing, plus any points the seller paid, were at least as much as the points charged. The funds you provided aren't required to have been applied to the points. They can include a down payment, an escrow deposit, earnest money, and other funds you paid at or before closing for any purpose. You can't have borrowed these funds from your lender or mortgage broker. 
7. You use your loan to buy or build your main home. 
8. The points were figured as a percentage of the principal amount of the mortgage. 
9. The amount is clearly shown on the settlement statement (such as the Settlement Statement, Form HUD-1) as points charged for the mortgage. The points may be shown as paid from either your funds or the seller's.

Note.

If you meet all of these tests, you can choose to either fully deduct the points in the year paid, or deduct them over the life of the loan.

In addition, if the loan is a home equity, line of credit, or credit card loan and the proceeds from the loan are not used to buy, build, or substantially improve the home, the points are not deductible.  See IRS Publication 936 for more information.