IRS Issues Guidance on Reporting of Mortgage Insurance Premiums

The IRS on Friday issued important guidance on how banks and other servicers of mortgage loans must report the deductibility of mortgage interest premiums. Last month’s appropriations package that was signed into law by President Trump included language extending the deduction for mortgage insurance premiums. The deduction was reinstated retroactively to calendar year 2018 and remains in effect for 2020.

The guidance addresses uncertainties that have arisen in recent years about whether and how to report mortgage insurance premiums while the deduction had lapsed. It confirms that premiums paid in 2019 should be reported on a timely filed Form 1098. With respect to 2018, the guidance provides flexibility on whether and how to report the relevant 2018 mortgage insurance information to customers and the IRS.