Massachusetts Undergraduate Student Loan Interest Deduction
The Massachusetts Undergraduate Student Loan Interest Deduction allows taxpayers to reduce their state taxable income by the amount of interest paid on qualified undergraduate student loans. This deduction is available to residents and part-year residents of Massachusetts who meet specific eligibility criteria.
Eligibility Requirements
- The loan must be for undergraduate education at a two-year or four-year college.
- The loan must be administered by the financial aid office of the educational institution.
- The loan must have been obtained through a state student loan program, federal student loan program, or a commercial lender.
- Loan proceeds must have been used solely for education expenses.
How to Claim the Deduction
- Residents: Enter the amount from U.S. Form 1040, Schedule 1, line 21 (not to exceed $2,500) on Massachusetts Form 1, line 10.
- Part-year residents: Multiply the amount from U.S. Form 1040, Schedule 1, line 21 (not to exceed $2,500) by the Massachusetts residency factor (Form 1-NR/PY, line 3) and enter the result in Schedule Y, line 10.
- Nonresidents: Multiply the amount from U.S. Form 1040, Schedule 1, line 21 (not to exceed $2,500) by the Massachusetts residency factor (Form 1-NR/PY, line 14g) and enter the result in Schedule Y, line 10.
Important Notes
- This deduction is only allowed if you are not claiming the same expenses on Schedule Y, line 12 (Undergraduate Student Loan Interest Deduction).
- The deduction is limited to $2,500 per year.
- Employer-provided student loan repayment assistance is treated separately and may be claimed on line 18b of Form 1 if it exceeds $5,250 and is not already excluded from federal gross income.
Source:
Form 1 Instructions
Form 1-NR/PY Instructions
Disclaimer: Always verify details with official Federal or State Department of Revenue Forms and Instructions.