Congress has extended legislation ensuring the tax deductibility* of mortgage insurance (MI) premiums, effectively reducing the cost of homeownership for many Americans. Borrowers with adjusted gross incomes of less than $109,000 can deduct the eligible amount of their MI premiums through the legislation’s new expiration date of December 31, 2020**. Homeowners should consult their tax advisors to determine if they’re eligible to claim the MI deduction.
*Borrowers with annual adjusted gross incomes of $100,000 or less can deduct their MI premiums from their federal income tax returns for homes purchased or refinanced during the law’s timeframe. Borrowers with incomes between $100,000-$109,000 are eligible for a reduced tax break under the law.
** The legislation was approved through December 31, 2020 and made retroactive to its last expiration of December 31, 2017. Since it now includes 2018, 2019, and 2020, some homeowners who were unable to claim the deduction in 2018 may wish to consult their tax advisors about filing an amended return for that year.