New Tax Deduction for Student Loan Interest in Pennsylvania
Starting with the 2025 tax year, Pennsylvania residents can deduct up to $2,500 in student loan interest on their state income taxes, aligning with the federal deduction limit.
Eligibility Criteria:
- Residency: Must be a Pennsylvania resident.
- Loan Type: Interest must be paid on qualified student loans.
- Income Limits: Deduction cannot reduce taxable income below zero.
Potential Tax Savings:
The maximum deduction of $2,500 could result in a tax savings of approximately $77 for eligible taxpayers.
Action Steps:
- Documentation: Keep records of student loan interest payments.
- Tax Preparation: Consult with a tax professional to understand how this deduction applies to your situation.
This new deduction offers modest relief to Pennsylvania residents repaying student loans, providing an opportunity to reduce taxable income and save on state taxes.
