Massachusetts Student Loan Interest Deduction
Massachusetts allows taxpayers to claim a deduction for interest paid on qualified undergraduate student loans. This deduction is designed to provide relief to individuals and families who have incurred education-related debt.
Eligibility Criteria
- The loan must be administered by the financial aid office of a two-year or four-year college.
- The borrower or a qualified dependent must have been enrolled as an undergraduate student at the institution.
- The loan must have been secured through a state student loan program, federal student loan program, or a commercial lender.
- The loan proceeds must have been spent solely for qualified education expenses.
How to Claim the Deduction
The deduction is claimed on Form 1 (Massachusetts Resident Income Tax Return) or Form 1-NR/PY (Nonresident/Part-Year Resident Income Tax Return). It is not available on other forms such as Form 2G or Schedule SC.
Important Notes
- The deduction is not available for interest on graduate-level student loans.
- Only interest paid during the tax year is deductible.
- The deduction is not subject to the same phase-out rules as the federal student loan interest deduction.
Source:
Form 1 Instructions
Form 1-NR/PY Instructions
Disclaimer: Always verify details with the official Massachusetts Department of Revenue forms and instructions before filing your return.