You can claim the deduction if all of the following apply:
- You paid interest during the tax year on a qualifying student loan
- Your filing status is NOT married filing separately
- You are legally obligated to pay interest on a qualified student loan
- Your modified adjusted gross income (MAGI) is less than a specific amount set annually
- Your or your spouse are not claimed as a dependent on someone else’s return
You may deduct the lesser of $2,500 or the amount of interest you actually paid during the year.
What are the income limits for eligibility?
For the 2020 tax year:
If you are a single filer, the phase out begins at $75,000. You can't claim the deduction, if your MAGI is $85,000 or more.
If you are married filing joint, the phase out begins at $140,000. You can't claim the deduction, if your MAGI is $170,000 or more.