Amend tax return for student loan interest

There are tax consequences for your situation, but filing amended returns is not the way to handle it.

You have two pieces of income: 1. the reimbursement of interest deductions claimed in previous years and 2. forgiven loan money. 

Enter the two items separately, in TurboTax (TT).  They both end up on line 8 of Schedule 1. 

You must declare the interest reimbursement,  as income for the year you received it.  

In TurboTax (TT), enter at:
- Federal Taxes tab (Personal in  Home & Business)

 - Wages & Income

Scroll down to:

-Less Common  Income

      -Misc Income, 1099-A, 1099-C

       - On the next screen, choose – Reimbursed Deductions from a prior year

         -On the next screen, choose Other Itemized Deductions (even though technically it was not an "itemized deduction")

You do not have to declare the loan forgiveness as income, unless you receive a form 1099-C for the amount forgiven. 

In TurboTax (TT), enter at:
- Federal Taxes tab (Personal in  Home & Business)

 - Wages & Income

Scroll down to:

-Less Common Income

      -Misc Income, 1099-A, 1099-C

       - On the next screen, choose – Cancellation of Debt (form 1099-C).  

Will I get something in the mail saying how much interest I was reimbursed?