On December 18, 2015, the President signed legislation that renews the tax deductibility of mortgage insurance (MI) premiums for qualified borrowers through 2016.
The deductibility is effective for purchase and refinance transactions closed after December 31, 2014. MI premiums paid or accrued after December 31, 2014 and through December 31, 2016 may qualify for tax deductibility on borrwers’ subsequent federal tax returns as follows:
- Borrowers with adjusted gross incomes below $100,000 may deduct 100% of their MI premiums.
- For borrowers with adjusted gross incomes from $100,000.01 to $110,000, deductions are phased out at 10% increments for each additional $1,000 of adjusted gross household income.
Please always consult a licensed tax adviser for further information or guidance surrounding this rule.