Yes, you may be able claim the interest paid on Parent PLUS loans on your taxes, even if your child files their own taxes. Here’s how it works:
- Eligibility: To claim the deduction, you must be legally obligated to repay the loan and must have made the payments yourself. Since Parent PLUS loans are taken out in your name, you meet the criteria.
- Deduction Limits: You can deduct up to $2,500 of interest paid on qualified student loans, including Parent PLUS loans, each year. This deduction is an adjustment to income, meaning you can claim it even if you don't itemize deductions
- Income Phaseouts: The deduction is subject to income phaseouts. For 2024, the phaseout begins at $75,000 for single filers and $150,000 for married couples filing jointly. If your modified adjusted gross income (MAGI) exceeds these limits, the deduction may be reduced or eliminated
- Your filing status affects eligibility. The deduction is unavailable if you file as “Married Filing Separately” or if you can be claimed as a dependent on someone else’s tax return.
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