Preparing Form 1040-NR (continued)

Student Loan Interest Deduction

Many foreign students and scholars incur interest charges while temporarily in the U.S., but very few of those interest charges are tax-deductible. The only type of interest that can be deducted is qualified student loan interest. All of the following conditions must be met for interest to be qualified student loan interest:

• The interest must have been paid during the tax year
• The interest repayment must have been required to be paid
• Filing status must be Single or Qualifying Surviving Spouse
• The loan must have been issued to pay for educational expenses, and
• The recipient of the loan must be at least a half-time student
• The lender must be a qualifying U.S. institution