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 taxpayer is legally obligated to pay interest on a qualified student loan
• The taxpayer paid interest on a qualified student loan
• The interest is on a loan used to pay tuition and other qualified higher education 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
• The person for whom the expenses were paid or incurred was an eligible student

Conduct a probing interview to verify that the taxpayer meets all these tests for the deduction.

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.