Paul Sanchez
The ability to deduct mortgage insurance premiums from federal taxes has changed over the years. The Further Consolidated Appropriations Act of 2020 allowed eligible taxpayers to deduct mortgage insurance premiums for the 2018 through 2021 tax years. However, this deduction expired on December 31, 2021, and is no longer available for tax years after 2021. If you were eligible for the deduction in previous years but did not take it, you may be able to amend your old tax returns to claim it retroactively. It's important to note that there are specific requirements and restrictions for claiming this deduction, such as the need to itemize deductions and limitations based on income.
| Characteristics | Values |
|---|---|
| Mortgage insurance premium deduction availability | Available through 2020 tax year, reintroduced for 2018-2021 tax years, expired at the end of 2021 |
| Eligibility criteria | Itemized tax deductions, AGI under $109,000 or $54,500 for married couples filing separately |
| Amending returns | Possible to amend old returns and claim deductions retroactively for eligible years |
| Deadline | April 15, 2025, with a possible extension until October 15, 2025 |
| Future legislation | The Mortgage Insurance Tax Deduction Act of 2025 introduced, pending approval |
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What You'll Learn
- The Mortgage Insurance Tax Deduction Act of 2025 could allow you to amend old returns to claim PMI tax deductions
- The deduction was available for eligible homeowners for the 2018–2021 tax years
- You can't deduct mortgage insurance premiums as points in the year paid or over the life of the mortgage
- You can request your lender remove PMI when you've built 20% equity
- The deduction doesn't exist for premiums paid after December 31, 2021
The Mortgage Insurance Tax Deduction Act of 2025 could allow you to amend old returns to claim PMI tax deductions
Private mortgage insurance (PMI) is often required for homebuyers who put down less than 20% on their homes. These insurance premiums were not deductible from federal taxes for years, but the legislation surrounding this has evolved. The Tax Relief and Health Care Act of 2006 introduced the deduction for mortgage insurance premiums. Congress has made several moves to extend or reinstate this deduction since then. The Further Consolidated Appropriations Act of 2020 allowed MIP and PMI tax deductions for tax years 2018 through 2021 if qualified taxpayers filed amended federal tax returns. The deduction expired at the end of 2021, so this insurance isn't tax-deductible for tax year 2022 and beyond. However, in February 2025, a new bill called the Mortgage Insurance Tax Deduction Act of 2025 was introduced to bring this tax deduction back. If it becomes law, it could allow you to amend old returns to claim PMI tax deductions.
The Mortgage Insurance Tax Deduction Act of 2025 must pass the House of Representatives and the Senate and be approved by the President to become law. If it does, you may be able to amend old returns to claim PMI tax deductions. Keep in mind that the deduction is only allowed if the mortgage on which you paid PMI was taken out on or after January 1, 2007. A home refinanced after that date still qualifies for the PMI deduction if it was your primary residence. A second home might also qualify if the mortgage was taken out on or after January 1, 2007, but it depends on how the home was used. PMI on a second property only qualifies if the home was used by you personally and not rented out.
There were also other restrictions to PMI deductions. For example, the mortgage insurance deduction only applied to refinanced funds up to the original loan amount. Additionally, the deduction wasn't allowed for taxpayers with an AGI over $109,000 or $54,500 for married couples filing separately in 2021. If you qualify for the PMI deduction, the best strategy for eliminating it is to pay down your mortgage and request PMI cancellation when you've reached 20% equity in your home. This may save you money in the long run.
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The deduction was available for eligible homeowners for the 2018–2021 tax years
The mortgage insurance premium deduction was available for eligible homeowners for the 2018–2021 tax years. This was made possible by the Further Consolidated Appropriations Act of 2020, which allowed eligible taxpayers to deduct their Private Mortgage Insurance (PMI) or Mortgage Insurance Premiums (MIP) from their federal taxes.
To be eligible, homeowners needed to have paid their insurance in the applicable tax years (2018-2021) and itemize their tax deductions. The deduction was not allowed for taxpayers with an Adjusted Gross Income (AGI) over $109,000 or $54,500 for married couples filing separately in 2021.
The mortgage insurance premium deduction expired at the end of 2021 and is not available for tax year 2022 onwards. However, if you were eligible for the deduction but didn't take it, you may be able to amend old returns and claim it retroactively.
It's important to note that the deadline to file your 2024 taxes is April 15, 2025, and if you request an extension, you have until October 15, 2025, to file.
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You can't deduct mortgage insurance premiums as points in the year paid or over the life of the mortgage
The mortgage insurance premium deduction was available through the 2020 tax year. In 2021, the deduction was not available unless extended by Congress. The deduction expired at the end of 2021 and is not available for the 2022 tax year and beyond. This means that you can't deduct mortgage insurance premiums as points in the year paid or over the life of the mortgage.
Private mortgage insurance (PMI) has been tax-deductible for homeowners off and on in recent decades. In 2019, Congress reintroduced a federal tax deduction that allowed homeowners paying PMI to write off the premiums for the 2018, 2019, 2020 and 2021 tax years—but only if they itemized their tax deductions. While this deduction expired at the end of 2021, eligible homeowners who did not take advantage of the PMI tax deduction may be able to amend old returns to claim it.
The IRS states that mortgage insurance premiums are no longer deductible. Form 1098 will include only points that you can fully deduct in the year paid. However, it may report points that you can't deduct, particularly if you are filing separately from your spouse or have mortgages for multiple properties. You must take care to deduct only those points that are legally allowable. Additionally, certain points not included on Form 1098 may also be deductible, either in the year paid or over the life of the loan.
You can deduct home mortgage interest on the first $750,000 ($375,000 if married filing separately) of indebtedness. However, higher limitations ($1 million, or $500,000 if married filing separately) apply if you are deducting mortgage interest from indebtedness incurred before December 16, 2017.
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You can request your lender remove PMI when you've built 20% equity
Private mortgage insurance (PMI) has been tax-deductible for homeowners off and on in recent decades. In 2019, Congress reintroduced a federal tax deduction that allowed homeowners paying PMI to write off the premiums for the tax years 2018, 2019, 2020, and 2021, but only if they itemized their tax deductions. This deduction expired at the end of 2021. However, if you were eligible for the PMI tax deduction but didn't take it, you may be able to amend old returns to claim it retroactively. It's important to note that this deduction was only available for eligible homeowners for the 2018-2021 tax years, and the deadline to file your 2024 taxes is April 15, 2025, with a possible extension until October 15, 2025.
Now, focusing on your specific request:
You can request that your lender remove Private Mortgage Insurance (PMI) when you have built up 20% equity in your home. PMI is typically required by lenders when homebuyers make a down payment of less than 20% of the home's value. This insurance protects the lender in case the borrower defaults on their loan. While it doesn't directly benefit the borrower, it does allow them to purchase or refinance a home with a smaller down payment. Once you have reached 20% equity, you can make a written request to your lender to remove PMI. It's a good idea to check with your lender to see if they have a specific form for this process.
To speed up the removal of PMI, you can make extra payments toward your principal balance to build equity faster. Additionally, if you believe your home has increased in market value, you can pay for an appraisal to prove it and request PMI removal if your loan-to-value ratio (LTV) is 78% or lower. Remember, PMI can add a significant amount to your monthly mortgage payments, so removing it can provide considerable savings.
It's worth noting that there are different requirements for mortgages through the Federal Housing Administration (FHA) or Department of Veterans Affairs (VA). If your lender is paying for your mortgage insurance, different rules may apply, so it's important to contact your servicer for specific information.
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The deduction doesn't exist for premiums paid after December 31, 2021
The tax law allowing deductions for mortgage insurance premiums expired on December 31, 2021. This means that any premiums paid after this date cannot be deducted from your federal tax return. The deduction was previously allowed under the Consolidated Appropriations Act of 2021 but has since expired and has not been extended. This applies to all types of mortgage insurance, including PMI and MIP.
The itemized deduction for mortgage insurance premiums is no longer available. Previously, homeowners could deduct the premiums they paid for private mortgage insurance (PMI) from their taxes if they itemized their deductions. PMI is typically required by lenders when a homeowner makes a down payment of less than 20% on their home, providing additional protection for the lender. While this deduction provided some tax relief for homeowners, it is no longer in effect as of 2022.
The change in tax law means that any mortgage insurance premiums paid after December 31, 2021, are not deductible. This applies to both new and existing mortgages with PMI. For those who have a qualified mortgage insurance contract issued after December 31, 2006, the deduction was available for tax years 2018 to 2021. However, it is important to note that this deduction has expired and is no longer available unless it is reintroduced by Congress or through new legislation.
While the mortgage insurance premium deduction is no longer available, there may be other tax deductions that homeowners can leverage to their benefit. Additionally, if you were eligible for the PMI tax deduction in previous years but did not take it, you may still be able to amend your old returns and claim it retroactively. It is important to note that this applies only if your mortgage was taken out on or after January 1, 2007, and there may be other restrictions that apply.
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Frequently asked questions
No, the itemized deduction for mortgage insurance premiums has expired and is no longer available.
Yes, the mortgage insurance premium deduction was available for tax years 2018 through 2021.
You may be able to amend old returns to claim the mortgage insurance deduction if you were eligible for it. However, the deduction was only allowed if certain conditions were met, such as the mortgage being taken out on or after January 1, 2007, and the insurance being paid during the eligible tax years.
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