March 1, 2007
Can I deduct the interest on my daughter’s student loans?
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.
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