When a married couple files separate returns, the mortgage interest deduction belongs to the spouse who was legally obligated on the loan and actually paid the interest from their own money. Both conditions have to be met. If both spouses are on the note and both paid, each deducts the share they personally paid. Whose name is printed on the Form 1098 does not decide the split.
How the IRS Decides Who Paid
The rule is a payment-tracing rule. Being a co-borrower gives you the legal obligation to pay, but the deduction follows the dollars. The IRS wants to see that the money came from your separate, traceable funds.
An example makes it concrete. Suppose both spouses are on the mortgage. Spouse A pays 70% of the year’s payments out of an individual checking account, and Spouse B pays the other 30% from a separate account. Spouse A deducts 70% of the mortgage interest reported for the year; Spouse B deducts 30%. If one spouse made every payment from their own account, that spouse deducts all of the interest and the other deducts none.
Form 1098 does not change any of this. Lenders issue the 1098 under one borrower’s name and report the total interest paid on the loan. It is a reporting document, not an allocation. How you divide the deduction depends on who wrote the checks.
When Only One Spouse Is on the Mortgage
If only one spouse signed the note, that spouse holds the entire legal obligation and generally takes the full deduction, provided they paid from their own funds. The spouse who is not on the loan has no legal liability for the debt and ordinarily cannot deduct any of the interest, even if they helped pay it. This is a common trap for couples where one spouse owned the home before marriage and kept the loan in their name alone.
If the 1098 Isn’t in Your Name
You can still claim your share of the interest when the 1098 was issued to your spouse. Report your portion on Schedule A, line 8b, as mortgage interest not reported to you on Form 1098. Attach a statement to your paper return showing how much interest each of you paid and the name and address of the person who received the 1098.1Internal Revenue Service. Other Deduction Questions 2
Records matter here. Keep bank statements or canceled checks that prove which account funded each payment. This is where MFS returns get challenged most often, and the burden is on you.
Payments From a Joint Checking Account
Many couples pay the mortgage from a shared account, which muddies the tracing. When both spouses have an equal interest in a joint account, the IRS generally treats each as having paid half of whatever comes out of it. Each spouse deducts 50% of the mortgage interest paid from that account.
That default holds even when one spouse deposits far more into the account than the other. You can argue for a different split, but without careful records showing the source of each deposit and the timing of each payment, the 50/50 presumption is what the IRS will apply and what an examiner will accept. Couples who plan to file separately are better off paying the mortgage from individual accounts to create a clean paper trail.
Community Property States Follow a Different Rule
If you live in Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin, community property law usually overrides the payment-tracing analysis. Income earned and debts incurred during the marriage are treated as owned equally by both spouses, so mortgage interest is typically split 50/50 between MFS returns regardless of which spouse actually wrote the check.
The 50/50 default can be rebutted if you can prove the mortgage was paid entirely from separate property, such as an inheritance kept in an individual account or assets owned before the marriage. The spouse claiming more than half carries the burden of proof. MFS filers in community property states must also file Form 8958 to show how income and deductions were allocated between the two returns.2Internal Revenue Service. About Form 8958, Allocation of Tax Amounts Between Certain Individuals in Community Property States
Both Spouses Have to Itemize, or Neither Can
Mortgage interest is an itemized deduction, and MFS filers face a rule that does not apply to joint filers: if one spouse itemizes, the other spouse cannot take the standard deduction and must also itemize.3Internal Revenue Service. Itemized Deductions, Standard Deduction It is mandatory.
For 2026, the MFS standard deduction is $16,100.4Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 If one spouse has enough deductions to itemize but the other doesn’t, the second spouse still loses that $16,100. Run both returns together before deciding. In many households this rule alone makes MFS more expensive overall than filing jointly.
The Deduction Limit Is Cut in Half
Joint filers can deduct interest on up to $750,000 of home acquisition debt. For MFS filers, that ceiling is halved to $375,000 per spouse.5Internal Revenue Service. Publication 936 – Home Mortgage Interest Deduction Interest attributable to loan balances above your $375,000 share is not deductible. On a high-value property this cap can eat a real portion of the deduction.
Property taxes travel with the same allocation logic and their own halved cap. The SALT deduction limit for 2026 is $40,000 for joint filers and $20,000 for each MFS spouse, and that ceiling covers all state and local taxes combined, not just real estate.6Internal Revenue Service. Topic No. 503 Deductible Taxes If property taxes are paid through an escrow account bundled into the monthly mortgage payment, the deduction follows the same funds you used to trace the interest.
The short version: figure out who paid, document it, then apply the halved limits. When the payments came from a joint account, expect a 50/50 split unless you can prove otherwise; in a community property state, expect 50/50 as the starting point regardless of the account.