Student Loan Interest Deduction Calculator 2026
Estimate your 2026 student loan interest deduction (IRC §221) after the $2,500 cap and MAGI phase-out, plus your estimated federal tax savings.
Filing Status
Qualifying Surviving Spouse uses the MFJ phase-out (Pub 970).
Student Loan Interest Paid
From Form 1098-E, Box 1. Capped at $2,500 per return.
Modified AGI (MAGI)
For most filers, MAGI matches the AGI you report on Form 1040, line 11.
Marginal Federal Bracket
2026 ordinary income brackets. Pick the one your last dollar lands in.
Not sure? Use the Tax Bracket Calculator.
Federal tax savings are an estimate based on the marginal bracket you select. State income tax savings may add to this in states that conform to federal AGI. Not tax advice, so check with a tax professional.
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How the Student Loan Interest Deduction Works
The student loan interest deduction is an above-the-line adjustment to income, reported on Schedule 1, Line 21. You can claim it whether or not you itemize, which is part of why it's such a quiet workhorse for borrowers in repayment. It reduces your AGI directly, and that knock-on effect can also pull you under thresholds for other AGI-sensitive items like IRA deductions, education credits, and ACA premium tax credits.
The deduction equals the smaller of two figures: (a) the qualified student loan interest you paid during the year, or (b) $2,500. If you paid $600 or more in interest to a single lender, you'll receive Form 1098-E showing the figure in Box 1. You can still deduct interest below $600, just keep records, since the lender isn't required to send a 1098-E.
Who Qualifies
To claim the deduction, all of the following must apply: you're legally obligated to pay interest on a qualified student loan; your filing status isn't Married Filing Separately; you aren't claimed as a dependent on anyone else's return; and your MAGI sits below the phase-out cap for your filing status. The loan itself must have been taken out solely to pay qualified higher education expenses (tuition, fees, room and board, books, supplies, equipment, and necessary transportation) for you, your spouse, or someone who was your dependent when the loan was originated.
MAGI for §221
For most filers, MAGI for the student loan interest deduction equals your AGI. The technical definition adds back a handful of less-common items: the foreign earned income exclusion (§911), foreign housing exclusion/deduction, Puerto Rico income exclusion, and the American Samoa exclusion. If none of those apply to you, just use the AGI from Form 1040, line 11.
2026 MAGI Phase-Out by Filing Status
All ranges below come from Rev. Proc. 2025-32 §3.21 (the 2026 inflation adjustments). The $2,500 cap itself is statutory under IRC §221(b)(1) and not indexed for inflation.
| Filing Status | Full Deduction (MAGI ≤) | Partial Range | No Deduction (MAGI ≥) |
|---|---|---|---|
| Single / Head of Household / QSS | $85,000 | $85,001 – $99,999 | $100,000 |
| Married Filing Jointly | $175,000 | $175,001 – $204,999 | $205,000 |
| Married Filing Separately | Not eligible (IRC §221(e)(2)) | ||
Inside the phase-out range, the reduction is linear. For Single/HoH, every additional $1 of MAGI over $85,000 reduces your capped interest by $1 / $15,000. For MFJ, every additional $1 of MAGI over $175,000 reduces it by $1 / $30,000. The IRS rounds the eligible deduction to the nearest whole dollar per Pub 970 Worksheet 4-1.
How Much You Could Save (2026 Brackets)
The deduction reduces your taxable income, so its dollar value depends on your marginal bracket. Here's what the maximum $2,500 deduction is worth at each 2026 bracket:
| Eligible Deduction | 10% | 12% | 22% | 24% | 32% | 35% | 37% |
|---|---|---|---|---|---|---|---|
| $500 | $50 | $60 | $110 | $120 | $160 | $175 | $185 |
| $1,000 | $100 | $120 | $220 | $240 | $320 | $350 | $370 |
| $1,500 | $150 | $180 | $330 | $360 | $480 | $525 | $555 |
| $2,000 | $200 | $240 | $440 | $480 | $640 | $700 | $740 |
| $2,500 (max) | $250 | $300 | $550 | $600 | $800 | $875 | $925 |
OBBBA Didn't Change §221
The One Big Beautiful Bill Act (P.L. 119-21) made several changes to education-related tax provisions, but the §221 student loan interest deduction itself was not modified. The $2,500 cap and the MAGI phase-out continue under their pre-existing rules. The only 2026 adjustment is the annual inflation update to the phase-out thresholds. OBBBA Sec. 70119 modified §108(f)(5), the exclusion for loans discharged due to death or disability, which is a separate provision. Sec. 70412 made the §127 employer student loan payment exclusion permanent, but those employer-excluded payments aren't eligible for the §221 deduction (you didn't pay them with after-tax dollars, so there's nothing to deduct).
Frequently Asked Questions
Common questions about student loan interest deduction calculator 2026
Can I claim the student loan interest deduction if I'm married filing separately?
No. IRC §221(e)(2) and IRS Topic 456 explicitly exclude Married Filing Separately from the deduction. Married couples have to file jointly to claim it. Qualifying Surviving Spouse uses the MFJ phase-out and is allowed the deduction.
What counts as a qualified student loan for §221?
A loan taken out solely to pay qualified higher education expenses for you, your spouse, or someone who was your dependent when the loan was originated. The education must have been provided during an academic period for an eligible student. Loans from a related person (like a parent) or from a qualified employer plan don't qualify.
Which education expenses qualify the underlying loan?
Tuition and fees, room and board, books, supplies, equipment, and other necessary expenses such as transportation. Qualified expenses are reduced by tax-free scholarships, employer-provided educational assistance, and certain other benefits before testing whether the loan qualifies.
What if I was claimed as a dependent on someone else's return?
You can't take the deduction for that tax year. Neither you nor your spouse (if filing jointly) can be claimed as a dependent on someone else's return in the same year you want to claim the student loan interest deduction.
Can I deduct interest on a refinanced or consolidated student loan?
Yes. Interest on a loan used solely to refinance a qualified student loan of the same borrower is deductible, and so is interest on a single consolidation loan used solely to refinance two or more qualified student loans of the same borrower. The refinanced or consolidated loan inherits the qualified status of the original loans.
Is this a deduction or a credit, and is it better than the standard deduction?
It's a deduction, specifically an above-the-line adjustment to income on Schedule 1, Line 21. You take it whether or not you itemize. A credit would reduce your tax dollar-for-dollar; this deduction reduces your taxable income, so its value depends on your marginal bracket. At 22%, every $1,000 of deduction saves you about $220 in federal tax.
Is capitalized interest deductible? What about voluntary payments?
Yes to both. Capitalized interest (unpaid interest the lender added to your principal) is treated as student loan interest and becomes deductible as you make payments on the loan. Voluntary interest payments, including interest paid while still in school or during deferment, are also fully deductible.
Why does my deduction get cut even though I paid more than $2,500?
Two reasons can stack. First, the deduction is capped at $2,500 even if you paid more interest. Second, once your MAGI enters the phase-out range ($85,000 to $100,000 single/HoH, or $175,000 to $205,000 MFJ for 2026), the capped amount is reduced proportionally. Above the top of the range, the deduction goes to zero.