March 1, 2007

Can I deduct the interest on my daughter’s student loans?

Posted in Parent PLUS Loans at 4:24 PM by Joe From Boston


According to Leslie Michael, CPA, PFS, CFP, Michael Associates, Indianapolis you can if three conditions are met.  The article can be found in USA Today.

Q: I am paying my daughter’s student loan. Do I get to deduct her student loan interest on my tax return?

Answer by AICPA member Leslie Michael:  You can deduct the interest paid on a student loan for your daughter if you meet 3 conditions.

These are:

1) You are legally obligated to make the interest payments.

2) You actually made the payments during the year.

3) You claim an exemption for your daughter as a dependent on your tax return.

You should refer to IRS publication 970: Tax Benefits for Education (PDF).

The IRS also offers this fact sheet: Topic 456 — Student Loan Interest Deduction

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