IRS Issues Information Reporting Guidance for Mortgage Insurance Premiums

The Internal Revenue Service on Thursday issued a notice providing guidance to lenders on reporting mortgage insurance premiums treated as qualified residence interest. The guidance is intended to address uncertainties about how these amounts should be reported as a result of the budget law that was signed by President Trump earlier this month. The law includes an extension of the deductibility of mortgage interest premiums for eligible taxpayers for amounts paid or accrued through Dec. 31, 2017.

The amount of the premiums paid are reported on IRS Form 1098: Mortgage Interest Statement. Since the extension of the deduction was not in place at year-end and prior to the due date for providing Form 1098 to customers, there has been uncertainty among lenders about whether and how these amounts should be reported.

The IRS instructed lenders who have already filed Form 1098 and did not include the reportable mortgage interest premium to file corrected 1098s, including the reportable amounts, by the due date for filing the returns. Lenders who furnished statements to borrowers that did not include the mortgage interest premium should furnish corrected statements by March 15. For more information, contact ABA’s John Kinsella.