Who Can Claim the Deduction

To claim the deduction, the taxpayer must have paid qualified student loan interest for an eligible student under all the following conditions:

• The taxpayer cannot use Married Filing Separately status; married taxpayers must file a joint return with their spouse
• The taxpayer cannot be claimed as a dependent on someone else's return
• The loan was used to pay tuition and other qualified expenses for the taxpayer, the taxpayer's spouse, or someone whom the taxpayer claimed as a dependent, when the loan was taken out
• The education expenses were paid or incurred within a reasonable period of time before or after the loan was taken out

If someone else made interest payments on behalf of a taxpayer who is legally obligated to pay the qualified loan, then the taxpayer is treated as receiving payments from the other person and then making the payments. So, the taxpayer is allowed to deduct the payments.

	Question: Can taxpayers who were dependents when they took out their student loan start to deduct student loan interest after they are no longer a dependent? Answer: Yes. Although dependent taxpayers cannot claim the deduction, they can deduct interest payments made in later years when they can no longer be claimed as a dependent.