Can I deduct student loan payments made to Canada Student Loans?

Forum|Forum|6 years ago
February 2, 2020
2 replies
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Hi,

I'm a resident alien filing taxes, and am trying to find out if I can deduct the interest payments I have made on my (foreign) student loans. This means I don't have a 1098-E.

I've found other posts that say there is no requirement that the loan be held by a US bank, but that it has to have been for an "eligible educational institution." I've checked and FAFSA does recognize all of the universities I went to (I received loans from British Columbia and Canada for multiple degrees).

So without a 1098-E, how do I proceed?

linaj20201

You can create a Form 1098-E and enter the interest amount.

In TurboTax online, here are the steps:

Sign in to your account, select Pick up where you left off
At the right upper corner, in the search box, type in 1098e and Enter
Select Jump to 1098e
Follow prompt

Per IRS, you can claim the student loan interest you pay to a foreign bank as long as the foreign school you went to is an eligible institution that participates in a student aid program administered by the U.S. Department of Education. Click at the attached blue link to locate your school. If your school is on the list, it is an eligible institution hence you can deduct the interest.

Foreign schools, under Federal School Code List, select 2019-2020 Federal School Code List in Excel Format

I am also attaching the IRS publication 970 for your reference, read under Student Loan Interest Chapter 4. https://www.irs.gov/pub/irs-pdf/p970.pdf

victorleAuthor

Thanks for this helpful information. I'm a bit confused as I don't understand how I can "create my own form" if one was never issued to me. I can certainly calculate on my own how much interest I paid, but it wasn't in US dollars and it wasn't paid to a bank (the payment is unrelated to the schools I attended and goes directly to Canada Student Loans). How would I prove this using the software?

(P.S. The link to the foreign schools seems to be broken.)

linaj20201

In order to claim the deduction, your student loan has to be a qualified student loan which is used solely to pay qualified education expenses. As you said it is unrelated to the schools you attended, so did you use it to pay for any qualified education expenses like tuition, books, and fees? What did you use it for?

To check if your school is an eligible education institution, click here: https://ifap.ed.gov/ifap/fedSchoolCodeList.jsp

@victorle

paria55

Hi- I’m in the same situation. Did you figure it out?

DaveF1006

Yes, you can claim an educational credit for attending a school in Canada If your university participates in a student aid program administered by the US Department of Education although it may be difficult without a 1098T. Make sure you keep all records and statements issued by the university to substantiate your expenses. To enter.

Log into Turbo Tax
Go to federal>deductions and Credits>education
Go to Expenses and Schlorship (form 1098T)
Answer the preliminary questions and then say no when it asks if you have a 1098T
Next question will say OK let's see if you qualify for an exception. You need to qualify for one of the two exceptions listed on the page or else you won't be permitted to file without a 1098T.