Refunded Student Loan Interest

Forum|Forum|4 years ago
August 17, 2021
1 reply
12 views

I have a client that has been paying his student loans for several years. Last year the interest paid was some $8k plus and the maximum amount of $2500 was deducted on his 2020 tax return. He just informed me that due to the CARES Act he has had his 2020 interest refunded back to him. Therefore, we will have to amend his 2020 return. My question is, will he receive a revised 2020 1098E?

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Best answer by George4Tacks

Received in 2021 says to include it as an adjustment to 2021 student loan, or possibly show it as an income to the extent it was a deduction in prior years.

Think about how state tax refunds are treated.

George4Tacks

Level 15

Was the refund in 2020 or in 2021?

Answers are easy. Questions are hard!

lbonesAuthor

Level 6

The refunded amount (received on 8/9/2021) covered interest paid from March 2020 to June 2021

George4TacksAnswer

Level 15

Received in 2021 says to include it as an adjustment to 2021 student loan, or possibly show it as an income to the extent it was a deduction in prior years.

Think about how state tax refunds are treated.

Answers are easy. Questions are hard!

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