Mortgage Insurance Premium Deduction Extended Through 2013

Due to the American Taxpayer Relief Act of 2012, the mortgage insurance premium deduction has been extended through the end of 2013, meaning members may deduct premiums for mortgage insurance from their taxes for the tax years 2012 and 2013.

In response to this change, part of the deal to prevent the fiscal cliff, the Internal Revenue Service (IRS) has issued Announcement 2013-10 with updated specifications for electronic filing of Form 1098. The updated instructions for electronic filing indicate that mortgage insurance premiums will be “AMOUNT CODE AMOUNT TYPE” 4.

“Credit unions have been asking how this applies to paper filing requirements,” said David Curtis, the Northwest Credit Union Association’s (NWCUA’s) director of compliance services. “While the 2012 instructions for the 1098 have not been updated, it would be safe to assume that the information could be included in box 4.”

Here are the instructions for the Blank Box (Box 4):

“Enter any other item you wish to report to the payer, such as the address of the property that secures the debt, real estate taxes, insurance, or if you are a collection agent, the name of the person for whom you collected the interest. You do not have to report to the IRS any information provided in this box.”

 

Questions? Contact the Compliance Hotline: 1.800.546.4465, compliance@nwcua.org.

Posted in Business Solutions, Compliance, Strategic Link.