Who Can Claim the Mortgage Interest Deduction With Co-Owners?

When a home has more than one name attached to it, the mortgage interest deduction with co-owners is divided by who actually paid the interest, not by who is on the deed. Each co-owner who is personally liable on the mortgage note and who paid interest during the year claims their own share on their own return. Nobody gets a deduction automatically, and the combined amount everyone claims cannot exceed what the lender reported on Form 1098.

The Two Tests Every Co-Owner Has to Pass

The IRS applies two conditions before letting anyone deduct a dollar of mortgage interest. Fail either one and the deduction disappears, no matter what the ownership arrangement looks like on paper.

First, you have to be legally liable for the debt. Your name must appear on the mortgage note as a borrower, which makes you personally obligated to repay the loan. Being on the title or deed is not enough. Co-owners sometimes learn this the hard way: they own half the house but never signed anything at the lender’s office, so the IRS treats them as having no deductible mortgage debt.¹

Second, you can only deduct the interest you personally paid during the year. A co-borrower whose name is on the note but who contributed nothing to the payments gets no deduction. What your written or verbal arrangement said someone was supposed to pay doesn’t matter. What hit the lender’s account is what counts.

How the Split Actually Works

The deduction follows the money. If two co-owners each paid half the mortgage from separate funds, each deducts 50% of the interest reported on the 1098. If one covered 70% and the other 30%, the deduction splits the same way. If one co-owner paid the entire mortgage all year and the other paid nothing, the person who paid claims 100% of the deduction, regardless of what the ownership percentages on the deed say.

When payments come out of a joint bank account where both co-owners have equal rights to the funds, the IRS presumes each owner paid half the interest. That presumption holds unless someone can show unequal contributions to the account or a different payment arrangement.¹

One ceiling applies to everyone involved: the combined deductions claimed by all co-owners cannot exceed the total interest the lender reported. Overclaiming here is one of the easier mismatches for the IRS to catch, because the agency can compare the 1098 total against the Schedule A amounts filed by each borrower.

Reporting Your Share When Only One Person Gets the 1098

Lenders issue Form 1098 when more than $600 in interest was paid during the year, and they typically send it to only one borrower.² The other co-owners don’t lose their deduction. They just report it differently.

The co-owner who received the 1098 reports only their own share on Schedule A, line 8a, and should tell the other co-borrowers what their shares are.³

Co-owners who did not receive a 1098 report their share on Schedule A, line 8b, which is designated for mortgage interest not reported on a 1098 sent to them. They have to identify the name and address of the person who did receive the 1098. If you’re filing on paper, attach a statement showing how the interest was divided and write “See attached” next to line 8b.⁴ The cross-reference is how the IRS verifies that the total deducted across everyone doesn’t exceed what the lender reported.

When You Pay the Mortgage but Aren’t on the Note

There is a narrow exception for co-owners whose names appear nowhere on the mortgage. Under Treasury Regulation 1.163-1(b), a taxpayer who is the legal or equitable owner of property securing a mortgage can deduct the interest they pay, even if they aren’t personally liable on the note.⁵

Proving equitable ownership is harder than it sounds. Tax courts have required the person claiming the deduction to show they carry the real benefits and burdens of owning the home: making the mortgage payments directly to the lender, paying property taxes, covering insurance and maintenance, and actually living there. If the legal owner on the title never lived in the home and never contributed to the mortgage, the person who did all of that may qualify as the equitable owner.

Courts have also denied the deduction when taxpayers couldn’t produce documentation backing the claim. A written agreement between co-owners spelling out financial responsibility makes a far stronger case than after-the-fact testimony. If you pay the mortgage but your name isn’t on the note, put the arrangement in writing before filing season.

The Debt Limits That Cap the Deduction

For mortgages taken out after December 15, 2017, you can deduct interest on up to $750,000 of mortgage debt ($375,000 if married filing separately).¹ Older mortgages taken out on or before that date keep a higher limit of $1 million ($500,000 if married filing separately). The One Big Beautiful Bill Act made the $750,000 limit permanent, so the earlier expectation that it would revert to $1 million for 2026 no longer applies.

For unmarried co-owners, the cap works more generously. In Voss v. Commissioner, the Ninth Circuit held that the statutory mortgage debt limit applies per taxpayer, not per residence.⁶ Two unmarried co-borrowers on a post-2017 mortgage can each deduct interest on up to $750,000 of debt, covering as much as $1.5 million in combined mortgage debt. A married couple filing jointly shares a single $750,000 cap between them. The IRS acquiesced to Voss, though taxpayers outside the Ninth Circuit should know that their local courts are not bound by the decision.

Married Co-Owners

Married couples filing jointly deduct the full amount of qualifying mortgage interest on their one return without splitting anything. It doesn’t matter whose name is on the note or who wrote the checks. Joint filing treats the couple as one taxpayer.

Filing separately changes the picture. Each spouse can only deduct interest they personally paid, following the same rules that apply to any other co-owner arrangement, and the mortgage debt limit drops to $375,000 per spouse for post-2017 loans.¹ If either spouse itemizes when filing separately, the other has to itemize too, even if the standard deduction would otherwise produce a bigger benefit.

The Itemizing Threshold Comes First

None of this matters unless you itemize. The mortgage interest deduction only produces a benefit if your total itemized deductions, including mortgage interest, property taxes, and charitable gifts, exceed the standard deduction. For 2026, the standard deduction is $16,100 for single filers, $32,200 for married couples filing jointly, and $24,150 for heads of household.⁷

Co-owners who split a modest mortgage often find that their share of the interest, combined with their other deductions, doesn’t clear that threshold. Each co-owner makes the itemize-or-not call independently based on their own return. One co-owner may benefit from itemizing while another is better off taking the standard deduction.

The deduction also only applies to a qualified home, meaning your main home or one second home. Interest on a third property, or on a pure rental, doesn’t qualify under Schedule A.¹

What to Keep in Your Records

Both co-owners should keep documentation, but the one who didn’t receive the Form 1098 carries the heavier burden. Useful evidence includes bank statements showing mortgage payments or electronic transfers, canceled checks made out to the lender, and records of transfers between co-owners if one person collects funds and makes the actual payment.

A written agreement spelling out payment responsibilities isn’t required by the IRS, but it is the single best piece of evidence if questions come up later. A simple signed document stating who pays what percentage and from which accounts removes ambiguity years after the fact. Keep these records for at least three years from the date you file the return claiming the deduction.⁸

1
Internal Revenue Service. Publication 936 (2025), Home Mortgage Interest Deduction
2
Internal Revenue Service. About Form 1098, Mortgage Interest Statement
3
Internal Revenue Service. Publication 936 (2025), Home Mortgage Interest Deduction – Section: How To Report
4
Internal Revenue Service. Instructions for Schedule A (Form 1040)
5
GovInfo. Internal Revenue Service, Treasury Reg 1.163-1
6
Internal Revenue Service. AOD 2016-02 – Voss v. Commissioner
7
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
8
Internal Revenue Service. How Long Should I Keep Records?