When reporting mortgage interest on your federal income tax return, the entry location depends on whether you are claiming an itemized deduction or a mortgage interest credit.
For Tax Deduction (Itemized Deductions)
Enter mortgage interest on Schedule A (Form 1040):
- Line 8a – Mortgage interest reported to you on Form 1098
- Line 8b – Mortgage interest not reported on Form 1098 (or not reported in your name on Form 1098)
- Line 8c – Points (generally deductible under IRS rules if eligible)
The amount typically comes from Box 1 of Form 1098, issued by your lender if $600 or more in mortgage interest was received during the year.
You may only deduct mortgage interest that is:
- Paid on a loan secured by a qualified home (main home or second home), and
- Within applicable IRS limits under Publication 936 (including acquisition debt limitations), and
- Actually paid by you or allocable to your share of the obligation.
For Mortgage Interest Credit (MCC Recipients)
If you received a Mortgage Credit Certificate (MCC) from a state or local housing agency, you may claim a credit using Form 8396 (Mortgage Interest Credit).
- Line 1: Enter qualified mortgage interest paid on the certified indebtedness amount (generally based on Form 1098, Box 1, limited by MCC terms)
- Line 2: Enter the MCC credit rate shown on your certificate
- Line 3: Multiply Line 1 × Line 2
- Line 9: Allowable mortgage interest credit for the year
The credit is then reported on:
- Schedule 3 (Form 1040), Line 6g
Important Notes
- You may deduct only the portion of mortgage interest that you are legally obligated to pay and actually paid.
- If multiple borrowers are involved, each taxpayer must report only their respective share of interest paid.
- Mortgage interest deduction is limited by debt thresholds:
- Up to $750,000 of qualified acquisition debt for loans incurred after December 15, 2017
- Up to $1,000,000 for grandfathered acquisition debt
- Points, prepaid interest, and refinancing adjustments must follow rules in Publication 936.
- The MCC credit reduces allowable mortgage interest deduction dollar-for-dollar.
Source:
Schedule A (Form 1040) Instructions
Form 8396 Instructions (2025)
Form 1098 Instructions (2025)
Publication 936, Tax Information for Homeowners (2025)
Disclaimer: Always verify details with current Federal or State Department of Revenue Forms and Instructions. For complex situations, consult a CPA or tax attorney.