My daughter has multiple student loans in her name where I am the co-signer. It seems like neither one of us can claim the interest on our taxes - I cannot because they are not in my name and she cannot because we claim her as a dependent. Is this correct?!
No. As a co-signer you may claim your daughter's student loan interest deduction.
To claim the student loan interest deduction,
Okay thank you. It is misleading when you click on the info icon while doing Turbo Tax and it says the loans must be in your name, even if you are a co-signer. I wish I had asked this last year - I left that interest on the table because I thought neither me nor my daughter could claim it. Is there anything I can do now about back-claiming it for 2020?
Yes, you will need to file a 2020 amended return to claim it.
@minx3276 wrote:
Okay thank you. It is misleading when you click on the info icon while doing Turbo Tax and it says the loans must be in your name, even if you are a co-signer. I wish I had asked this last year - I left that interest on the table because I thought neither me nor my daughter could claim it. Is there anything I can do now about back-claiming it for 2020?
You must be an obligated borrower (co-signing counts) and you must actually pay the loan payments. In the future, if you continue to make the payments after your child is not your dependent, you can still use the interest deduction because the student was your dependent when the loans were taken out.
Alternatively, when your child is no longer your dependent, if you make payments, your child can deduct the interest as if she paid it herself, instead of you claiming the deduction (if you choose to do this). The payments are treated as if you made a money gift to her and she made the payments. This is an exception to the usual rule that only the person who pays an expense can deduct it. But that is for the future. For now, you can deduct the interest if you are co-signer and you made the payments.
For 2020, you would have to file an amended return. Your state might or might not have a similar deduction, so we can't tell until you actually prepare the amended return whether you need to also file an amended state return.
https://ttlc.intuit.com/community/amending/help/how-do-i-amend-my-return/00/27439
I am experiencing a similar problem with this issue. I am a co-signer and have been paying the interest payments. Where in the software is this rectified> Do I just say "yes" when it asks if the 1098-E is in my name?
Yes,
I see that is part of the On-line program, but not asked in the Desktop version.
You can tell TurboTax "Yes" to get past that screen if the following is true:
"Generally, you can claim the deduction if all of the following requirements are met.
If you co-signed the loan, you are obligated to pay.