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Entering Form 1098-MA Mortgage Assistance Payments in the Individual Module in Lacerte

by Intuit• Updated 3 months ago

What's new for Form 5695 for tax year 2023:

Energy efficient home improvement credit: The nonbusiness energy property credit has changed to the energy efficient home improvement credit. The credit is extended to property placed in service through December 31, 2022. See here for more information.

Residential clean energy credit: The residential energy efficient property credit has changed to the residential clean energy credit. The credit rate for property placed in service in 2022 through 2033 is 30%. See here for more information.

Use Form 1098-MA to calculate amounts for Schedule A lines 10 or 11 in tax year 2021 and prior.

To enter Form 1098-MA on Schedule A line 10:

  1. Go to Screen 25, Itemized Deductions
  2. Scroll down to the Interest section
  3. Input the amount in the field Home mortgage interest & points on Form 1098 [A] (Ctrl+E) code 21

To enter Form 1098-MA on Schedule A line 11:

  1. Go to Screen 25, Itemized Deductions
  2. Scroll down to the Interest section
  3. Press Ctrl + E in the field Home mortgage interest not on Form 1098 (Ctrl+E) (code 22) and enter the following:
    • Payee's name
    • Payee's SSN or EIN
    • Payee's street address
    • Payee's city
    • Payee's state
    • Payee's ZIP
    • Amount

Who qualifies for the deduction

A special method to compute deductions for mortgage interest and real estate taxes on a main home may be used if the following two conditions apply:

  1. Homeowners received assistance from the following federal or state housing programs:
    • State Housing Finance Agency (HFA) Hardest Hit program in which program payments could be used to pay mortgage interest
    • An Emergency Homeowners' Loan program administered by the Department of Housing and Urban Development (HUD) or a state
  2. Homeowners meet the rules to deduct:
    • All of the mortgage interest on their loan
    • All of the real estate taxes on their main home

Amounts you can deduct

If these tests are met, then all mortgage payments made during the year to a mortgage servicer, the state HFA, or HUD may be deducted. This includes the amount shown in box 3 of Form 1098-MA, Mortgage Assistance Payments.

The total paid, however, may not exceed the sum of the following amounts:

  • Amount shown on Form 1098, Mortgage Interest Statement, in box 1 (mortgage interest received)
  • Amount shown in box 4 (mortgage insurance premiums and real property taxes)
  • Amount shown in box 5 (real property taxes)

This special method to compute deductions for mortgage interest and real estate taxes on a main home isn't required.

Refer to Publication 530 for more information.

Lacerte Tax 2022

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