IRS Implements Changes to Deductions of Mortgage Insurance Premiums

Gerry Nelligan
January 30, 2020

The IRS recently announced the implementation of provisions from P.L. 116-94, Division Q, which extends the applicability of Section 163(h)(3)(E) for tax years 2018 through 2020 to provide for the deductibility of mortgage insurance premiums (“MIP”) which are reported on Form 1098. More specifically, MIP aggregating in amounts of $600 or more received during a calendar year must be reported on said form.

The retroactive nature of this extension affects filing for applicable years. For TY 2018, taxpayers are not required to file or furnish corrected 1098 forms to report MIP for that year, but the IRS strongly suggests filing the amended 1098s for the sake of consistency in reporting. Furthermore, the IRS strongly suggests that payers make the adjusted information available so that applicable recipients can make a decision of whether or not to amend their TY 2018 returns. Corrected forms will be accepted by paper or electronically using the specifications and instructions for prior years.

For TY 2019 filing of Form 1098 must be done by the applicable due dates and reports must include MIP amounts in Box 5 of the form. If borrower statements have already been furnished without MIP in Box 5, then corrected statements must be issued.

To review this announcement from the IRS, please visit their website by clicking here.

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Gerry Nelligan

Gerry Nelligan is a Regulatory Analysis Supervisor at Sovos, leading a team of counsels covering information reporting, including 10-Series IRS reporting, Affordable Care Act (ACA) reporting and Automatic Exchange of Information (AEOI). Gerry received his J.D. from Suffolk University Law School and his B.A. from Providence College. He is a licensed attorney in the state of Massachusetts.
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