The 1098-E Student Loan Interest statement reports the amount of interest paid on a student loan during the previous calendar year for those borrowers in repayment. Parents may claim the student loan deduction for a qualifying dependent.
Loan servicers are required to report 1098-E information to the Internal Revenue Service (IRS) and to borrowers, should the amount of interest paid be greater than $600.00 or more for the year. You will receive a 1098-E if you have paid more than $600.00 to a federal loan servicer or a school within the calendar year. Keep in mind that if you did not pay $600.00 or more to one single servicer, you may need to request a 1098-E from each of your loan servicers.
Interest paid on Federal loans, including Direct Stafford, PLUS (For Parents and Grad Students) and Perkins loans may be included as a tax deduction as well as private student loan interest paid. You can reduce your income subject to tax by up to $2500.00.
You can take this deduction only if all of the following apply. You paid interest in 2016 on a qualified student loan. Your filing status is any status except married filing separately. Your modified adjusted gross income (AGI) is less than: $80,000 if single, head of household, or qualifying widow(er); $160,000 if married filing jointly.
Loan servicers will generally send out or make 1098-E statements available to borrowers in January or February.
For more detailed information on Tax Benefits for Education visit the IRS website at https://www.irs.gov/pub/irs-pdf/p970.pdf.