Student loan interest tax deductions
According to IRS.gov, you can reduce your income that’s subject to taxes if you’ve paid interest on a qualified student loan and meet several other eligibility requirements, including:1
- The student must be you, your spouse, or your dependent.
- The student must be enrolled at least half-time in a program leading to a degree, certificate, or other recognized educational credential at an eligible education institution.
- The individual income limit is $80,000 modified, adjusted gross income ($160,000 for married couples filing jointly).
Please also note:
- Your deduction cannot exceed $2,500 per year.
- Voluntary interest payments during school, deferment, or forbearance may be eligible for deduction.
- Interest paid on consolidation loans may be deducted.
For full details on eligibility requirements for a student loan deduction and how to claim it, see IRS Publication 970, Tax Benefits for Education, or speak with a tax professional.
Student loan tax credits
- American Opportunity Tax Credit: Undergraduates can take a credit for books, supplies, and tuition and fees. This credit may be available if your modified, adjusted gross income is $80,000 or less ($160,000 or less if filing jointly).2
- Lifetime Learning Tax Credit: Undergraduates, graduates, and those taking professional degree courses may qualify for a tax credit. This credit may be available if your modified, adjusted gross income is less than $68,000 ($136,000 if filing jointly).1
For eligibility and details on these programs, see IRS Publication 970, Tax Benefits for Education, or speak with a tax professional.