Since January 1, 1998, taxpayers who have taken loans to pay the cost of attending an eligible educational institution for themselves, their spouse, or their dependent generally may deduct interest they pay on these student loans. A student claimed as a dependent by another taxpayer are not eligible to claim this deduction. The maximum deduction each taxpayer is permitted to take increases from $1,000 in 1998 to $2,500 in 2001 and thereafter. The following table summarizes the yearly increases.
Year Maximum Deduction for Student Loan Interest
|
1998 |
$1,000 |
|
1999 |
$1,500 |
|
2000 |
$2,000 |
|
2001 |
$2,500 |
Beginning in 2002, students are no longer limited to deducting interest paid only during the first 60 months that interest payments are required on the loan.
To claim this Student Loan Interest Deduction on your Federal Income Tax, complete IRS Form 1040 or 1040A, indicating your Student Loan Interest Deduction in the Adjusted Gross Income section as directed in the instructions provided for these forms.
© 2009 Arizona Board of Regents.
Northern Arizona University, South San Francisco Street, Flagstaff, Arizona 86011
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