Student Loan Interest

[Seatreesp]

I am attempting to enter 1098-E info. for my dependent daughter on my married/joint tax return. 

I have cosigned for the loan, am legally obligated to pay and I have in fact paid it.  The IRS rules state that I am therefore eligible to deduct the loan interest.

The 1098-E has her name and social security # on it, not mine. The software does not allow me to enter the loan interest paid unless I state that the 1098-E is in my name with my SS # which it does not.  

Does anyone have a solution?

[BobKamman]

Hi there,

You’ve come to an Intuit site supporting tax professionals, and you may be looking for support as an individual taxpayer. Please visit the TurboTax Help site for support.

Cheers!

[athaureaux6]

If you your name does not appear in the loan, there is no way you can deduct it even if you cosigned it. It has to be the name of either you or your spouse, not your daughter even if it is your dependent. Sorry. 

[PATAX]

God bless you Bob... Why do they keep coming to this forum?...just my opinion....

[Seatreesp]

Thank you for your response to my question.  

Since Intuit software does not allow me to input Form-E information indicating that the borrower is my dependent and also lists her SS#, no avenue is provided to take this student loan interest deduction.

That said, I believe the problem is with the software not the legitimacy of the deduction.  IRS Publication 970 states that:

Student loan interest paid on a qualified student loan includes both required and voluntarily pre-paid interest payments.  You can claim Student loan interest deduction if all of the following apply:

• You paid interest on a qualified student loan in tax year 2020;
• You're legally obligated to pay interest on a qualified student loan;
• Your filing status isn't married filing separately;
• Your MAGI is less than a specified amount which is set annually; and
• Neither you nor your spouse, if filing jointly, can be claimed as dependents on someone else's return.

We meet all of these conditions.

Originators of Form 1098’s usually list only one responsible party on mortgage interest statements even if others can take the deduction and are equally obligated to pay. 

I believe the same principal applies to the 1098-E we received.  Hopefully, Intuit will take a closer look at this.

[qbteachmt]

@Seatreesp 

"Since Intuit software does not allow me to input Form-"

Yes, but which specific program are you using?

Because this is a forum for using ProSeries to prepare clients' tax returns.

Are you using TurboTax?

No one here can help with TurboTax issues.

[BobKamman]

The Regulations require only the first payor to be listed on the 1098-E. That does not mean co-borrowers cannot claim the interest if they paid it. As you point out, this is similar to the treatment of home mortgage interest.

26 CFR § 1.6050S-3 - Information reporting for payments of interest on qualified education loans.

(2) Payor. Payor means the individual who is carried on the books and records of the payee as the borrower on a qualified education loan. If there are multiple borrowers, the principal borrower on the payee's books and records is treated as the payor for purposes of section 6050S and this section.