When a married couple files separate returns, the spouse who claims the mortgage interest deduction is the one who was legally obligated on the loan and actually paid the interest from their own funds. Both conditions have to be met. The name printed on the Form 1098 your lender sends does not decide the split, and neither does whose name appears first on the note. What matters is the legal obligation to pay and the money trail behind each payment.
How to Split the Deduction When Both Spouses Are on the Loan
If both of you signed the mortgage, each spouse has the legal obligation covered. The deduction then follows the dollars. If Spouse A paid 70% of the year’s mortgage payments from an individual checking account and Spouse B paid the other 30% from a separate account, Spouse A deducts 70% of the interest and Spouse B deducts 30%. If one spouse made every payment from their own funds, that spouse claims the full deduction and the other claims nothing.
The Form 1098 is simply an information return. It reports the total interest paid on the loan for the year and is usually issued under one borrower’s name. How you divide that total between two separate returns is a separate exercise driven entirely by who actually wrote the checks.
When Only One Spouse Is on the Mortgage
If only one spouse signed the note, only that spouse has the legal obligation to pay. That spouse generally takes the entire deduction, assuming the payments came from their own money. The spouse not named on the loan has no legal liability for the debt and ordinarily cannot deduct any of the interest, even if they contributed cash toward the monthly payment. Legal obligation is a hard gate, not a soft factor.
Reporting Interest When the 1098 Isn’t in Your Name
If the lender issued the Form 1098 under your spouse’s name but you paid part or all of the interest, you still report your share on your own return. Enter it on Schedule A, line 8b as mortgage interest not reported to you on Form 1098. Attach a statement to a paper return showing how much interest each spouse paid, along with the name and address of the person who received the 1098.1Internal Revenue Service. Other Deduction Questions 2
This is the step where weak records cause the most trouble. Keep bank statements or canceled checks that show which account funded each payment. If the IRS questions the split, that paper trail is what settles it.
Payments From a Joint Bank Account
Many couples pay the mortgage from a shared checking account, which complicates the payment-tracing rule. If both spouses have equal rights to a joint account, the IRS generally treats each spouse as having paid half of whatever went out of it. Each spouse can deduct 50% of the mortgage interest paid through that account, and the same split applies to property taxes paid through escrow.
If one spouse earns substantially more and funds most of the joint account, you can argue for a different split, but the records have to show the flow of each dollar. Without that, the 50/50 presumption is easier to defend. Couples who expect to file separately often simplify matters by paying the mortgage from an individual account.
Community Property States Change the Default
If you live in Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin, the payment-tracing rule takes a back seat. In community property states, income earned and debts incurred during the marriage are generally treated as owned equally by both spouses. Mortgage interest and property tax deductions are typically split 50/50, even if only one spouse made every payment, because the money that paid the mortgage came from community funds that legally belong to both of you.
You can override the 50/50 default by showing the mortgage was paid entirely from separate property, such as an inheritance kept in an individual account or assets owned before the marriage. The burden of proof is on the spouse claiming more than half. Separate filers in community property states also have to file Form 8958 to show how income and deductions were allocated.2Internal Revenue Service. About Form 8958, Allocation of Tax Amounts Between Certain Individuals in Community Property States
If One Spouse Itemizes, the Other Must Too
Mortgage interest is an itemized deduction, which triggers a rule separate filers often miss. If one spouse itemizes, the other spouse cannot take the standard deduction and must also itemize.3Internal Revenue Service. Itemized Deductions, Standard Deduction It isn’t a choice. For 2026, the standard deduction for a separate filer is $16,100.4Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 If one spouse has enough deductions to beat that number but the other doesn’t, the second spouse still loses the standard deduction and may end up with a much higher tax bill than expected. Run the numbers together before anyone itemizes.
The Deduction Limits Are Cut in Half
Joint filers can deduct interest on up to $750,000 of mortgage debt used to buy, build, or substantially improve a home. For separate filers, that ceiling is halved to $375,000 per spouse.5Internal Revenue Service. Publication 936 – Home Mortgage Interest Deduction Any interest attributable to debt above a spouse’s $375,000 share is not deductible on that spouse’s return.
Mortgages taken out on or before December 15, 2017, keep a higher grandfathered limit: $1,000,000 for joint filers, or $500,000 per spouse filing separately.5Internal Revenue Service. Publication 936 – Home Mortgage Interest Deduction A later refinance keeps that higher ceiling as long as the refinanced balance doesn’t exceed the old loan balance.
The same halving applies to related deductions that often ride alongside mortgage interest. The SALT cap, which covers property taxes together with state and local income taxes, is $40,000 for joint filers in 2026 and $20,000 per spouse filing separately.6Internal Revenue Service. Topic No. 503 Deductible Taxes HELOC interest counts toward the same acquisition-debt ceiling as the primary mortgage, and only when the borrowed funds were used to buy, build, or substantially improve the home that secures the loan.5Internal Revenue Service. Publication 936 – Home Mortgage Interest Deduction
Allocate property taxes the same way you allocate interest. If taxes are paid through an escrow bundled into the monthly mortgage payment, the deduction follows the account that funded the payment. If both spouses paid equal shares from separate accounts, each claims half.