Student loan interest and the 1098-E form: Things to know

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In a Nutshell

If you pay $600 or more in interest on a qualified student loan in a year, your lender or loan servicer will report the amount on the 1098-E tax form. You’ll need this information to calculate any student loan interest deduction you may be eligible to take on your federal income taxes.
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This article was fact-checked by our editors and reviewed by Christina Taylor, MBA, senior manager of tax operations for Credit Karma.

Paying interest on a student loan for yourself, your spouse or a dependent may make you eligible for the student loan interest deduction. And the information on Form 1098-E from your lender can help you claim certain deductions you’re eligible for.

Form 1098-E reports the amount of student loan interest you paid in a year. Your loan servicer or lender should send you this form by Jan. 31 if you’ve paid at least $600 in interest on a qualifying student loan. If you’re paying off multiple loans with more than one servicer, you may receive several 1098-E forms.

Here are some important things to know about Form 1098-E and how to use it to calculate the student loan interest deduction.

What’s on the 1098-E form?

Start by making sure you received the right form and you’re looking at the right tax year — because there’s more than one type of education-related 1098 form. Boxes in the top right corner of the form show the tax year the form is for, the form number (1098-E) and Student Loan Interest Statement.

As far as IRS forms go, the 1098-E is a short one — just two numbered boxes in addition to basic information. Here’s a box-by-box rundown of what’s on the rest of the form.

On the left side of the form, you’ll see boxes for …

  • Recipient’s information: This is the name, address, phone number and tax identification number for the entity that received the interest, which is usually the loan servicer.
  • Borrower’s information: This is the name, address and identification number for the borrower (the person whose name is on the loan). On the borrower’s copy of the statement, some of the identification number may be redacted for privacy purposes, but the lender will send a version of this form to the IRS with the full number.
  • Account number: This is the account number your lender assigned to your student loan. Make sure it matches the one on your account statements — if you don’t get statements by mail, check to see if they’re available through your online account.

On the right side of the form are the two numbered boxes.

  • Box 1: In this box, your lender or loan servicer reports the amount of interest you paid to it during the year on one or more student loans in your name. The amount listed isn’t your total payments made during the year, and it doesn’t indicate the amount you paid toward the loan’s principal. If your loan was made on or after Sept. 1, 2004, Box 1 should include loan origination fees and capitalized interest received during the year. If your loan was made before that date, you may be able to deduct loan origination fees and capitalized interest not reported in Box 1.
  • Box 2: If Box 2 is checked, that means the loan origination fees and/or capitalized interest are not included in Box 1.

What should I do with Form 1098-E?

You should use your Form 1098-E to help determine if you qualify for a student loan interest deduction and how much you might be able to deduct.

To determine what portion of the interest you paid is deductible, check the number in Box 1 of Form 1098-E and complete the student loan interest deduction worksheet, which typically comes with the instructions for your Form 1040 federal income tax return.

After you’ve done your calculations, you should save Form 1098-E — and all your tax records — for at least three years. That’s generally how long the IRS has to audit your return, although there are exceptions. The IRS recommends you keep any documents that prove how much income you’ve earned and anything that supports tax credits or deductions you claim.

How much interest can I deduct?

The student loan interest deduction is one of the tax breaks available to students or their families. Eligibility to claim the deduction depends on your adjusted gross income, filing status and whether you paid interest on a qualifying loan — which is all outlined in IRS Publication 970.

The amount of interest you can claim each year is capped. For 2020, you may be able to reduce your taxable income by up to $2,500 of student loan interest you paid during the year.

But keep in mind that you’ll need to meet income requirements to claim the deduction.

What if I don’t get a 1098-E?

You might not get a 1098-E form if you paid less than $600 in interest on a student loan in a single year. If you haven’t received a 1098-E form but think you should have, contact your loan servicer and ask how much you paid in interest. And if you paid student loan interest that was less that $600, you may still be able to deduct that interest without a 1098-E, provided you meet all the requirements for the deduction.

Your loan servicer’s contact information should be on its website or your loan statements. If you have an online account where you make payments, you might be able to download your Form 1098-E from your account.

You also might not get the form if you’re still in school and have yet to start repaying your student loans. If you’re still attending school, check whether you or your parents can claim any education tax credits to save a little money on their taxes.

What’s next?

If you’re repaying a student loan, it pays to know whether you can claim a deduction on any interest included in your monthly payments. Look for Form 1098-E in the mail or on your online account. Then figure the student loan interest deduction, which could save you some money on your taxes if you qualify to take it.

Christina Taylor is senior manager of tax operations for Credit Karma. She has more than a dozen years of experience in tax, accounting and business operations. Christina founded her own accounting consultancy and managed it for more than six years. She codeveloped an online DIY tax-preparation product, serving as chief operating officer for seven years. She is an Enrolled Agent and the current treasurer of the National Association of Computerized Tax Processors and holds a bachelor’s degree in business administration/accounting from Baker College and an MBA from Meredith College. You can find her on LinkedIn.

Relevant sources: IRS Publication 970: Tax Benefits for Education | IRS Form 1098-E | IRS 1040 Instructions | IRS: How long should I keep records? | IRS: IRS Audits | IRS Revenue Proclamation 2018-57

About the author: Kim Porter is a writer and editor who has written for AARP the Magazine, Credit Karma,, U.S. News & World Report, and more. Her favorite topics include maximizing credit card rewards and budgeting. Wh… Read more.