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HELOC interest deduction

Updated: May 13


Question: Under new tax cut , can you write off interest payments for HELOCs?

Answer: Depends. The tax bill suspends the deduction for interest on home equity indebtedness. Thus, for taxable years from 2018-2025, the taxpayer may not claim a deduction for interest on home equity indebtedness.

Interest on Home acquisition debt and can be deducted on Schedule A subject to loan limit. (750K under the new tax cut)

Home acquisition debt is a mortgage to buy, build, or substantially improve a qualified home (your main or second home). It also must be secured by that home.\

Home equity indebtedness is any debt secured by a qualified residence other than acquisition indebtedness.

Therefore, whether interest on HELOC is deductible or not on Sch A is depends on if the HELOC qualify as home acquisition debt or as home equity debt.

If you would like to make an appointment to discuss more, please give this office a call 415-704-8989 or email me at ymckee@virtualcpaforyou.com. Book a meeting online.

Circular 230:The articles are for general information only. In accordance with IRS Circular 230 they are not considered tax opinions for purposes of relying on such statements in any challenge of the reporting of the above transaction by the IRS. If a full tax opinion is required certain procedures must be met . Also there is a significant cost for a full tax opinion to meet the requirements of Circular 230.


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