Updated October 17, 2026. Quick answer: Box 1 of Form 1098 shows the mortgage interest the lender received from you during the year, including home equity and line of credit interest, but not points or subsidy payments. Pub. 936 says the interest and points reported to you on Form 1098 generally go on Schedule A (Form 1040), line 8a. The form itself cautions that the box 1 amount may not be fully deductible.
Related reading on this site: IRS Publication 530.
More IRS forms and schedules for individual filers, read line by line: Form 8396 instructions.
Related reading on this site: IRS Publication 936.
IRS worksheets read line by line: Home Mortgage Interest Limit Worksheet.
Schedule A and Schedule B (Form 1040) for 2025, read line by line: Schedule A lines 5b and 5c, Schedule A line 8a and Schedule A lines 8b, 8c and 8e.
What box 1 reports
The borrower copy of the form defines the box in plain terms: “Shows the mortgage interest received by the recipient/lender during the year.” The line on the form is labelled “Mortgage interest received from payer(s)/borrower(s)”. A lender that received at least $600 of mortgage interest from you on any one mortgage is the one that furnishes the statement: “received from you at least $600 of mortgage interest (including certain points) on any one mortgage in the calendar year must furnish this statement to you.”
This page covers box 1 only. The other boxes on the same form are laid out in the Form 1098 boxes guide, and the general picture of the form, who sends it and when, is in the Form 1098 overview.
What goes into box 1 and what stays out
The lender side of the rules is written for the person filling in the form. The instruction opens this way: “Enter the interest (not including points) received on the mortgage from borrowers during the calendar year.” Read from your side, that means the number in box 1 is the interest the lender counted as received from borrowers, with points handled in a different box.
| Item | What the Form 1098 text says |
|---|---|
| Interest on a mortgage, home equity loan or line of credit | Included. “This amount includes interest on any obligation secured by real property, including a mortgage, home equity loan, or line of credit.” |
| Points | Left out. “This amount does not include points, government subsidy payments, or seller payments on a” buydown mortgage. |
| Government subsidy payments | Left out, same sentence. Your deduction may also be affected: “If your mortgage payments were subsidized by a government agency, you may not be able to deduct the amount of the subsidy.” |
| Prepaid interest that does not meet the exception | Left out by the lender: “Do not include government subsidy payments, seller payments, or prepaid interest that does not meet the exception explained under Prepaid Interest, earlier.” |
| Prepayment penalties and late charges | “Interest includes prepayment penalties and late charges unless the late charges are for a specific mortgage service.” |
Two of those rows are easy to overlook. The instruction for the lender also lists a third kind of loan beyond the mortgage and the home equity loan: “Include interest on a mortgage, a home equity loan, or a line of credit or credit card loan secured by real property.” What matters in that sentence is the security. A balance on a card-style loan is in the box only when it is secured by real property.
The prepaid interest caution
The borrower copy has a boxed warning about interest paid early: “If you prepaid interest in the calendar year that accrued in full by January 15 of the subsequent year, this prepaid interest may be included in box 1.” “However, you cannot deduct the prepaid amount in the calendar year paid even though it may be included in box 1.”
On the lender side, the rule is that prepaid interest follows the year it accrues: “Report prepaid interest (other than points) only in the year in which it properly accrues.” There is an exception: “Interest received during the current year that will properly accrue in full by January 15 of the following year may be considered received in the current year, at your option”. Pub. 936 tells the borrower what to do about it: “You will have to figure the interest that accrued for 2026 and subtract it from the amount in box 1.” It adds that you “will include the interest for January 2026 with other interest you pay for 2026.”
Home equity loans and the acquisition indebtedness caution
The asterisk on box 1 sends you to a caution printed on the form: “The amount shown may not be fully deductible by you.” It continues, “Limits based on the loan amount and the cost and value of the secured property may apply.” The instructions to the borrower narrow it further: “If the interest was paid on a mortgage, home equity loan, or line of credit secured by a qualified residence, you can only deduct the interest paid on acquisition indebtedness, and you may be subject to a deduction limitation.”
Pub. 936 applies that to the reported number: “any interest showing in box 1 of Form 1098 from a home equity loan, or a line of credit or credit card loan secured by the property, is not deductible if the proceeds were not used to buy, build, or substantially improve a qualified home.” The box does not sort the interest by what the money was used for, so the sorting is left to you and to the loan records. The publication also states the basic conditions for any deduction: “You file Form 1040 or 1040-SR and itemize deductions on Schedule A (Form 1040).”
Where the amount goes and what to do with several borrowers
For the borrower, the landing spot is stated in the publication: “Generally, you can deduct the home mortgage interest and points reported to you on Form 1098 on Schedule A (Form 1040), line 8a.” The walk-through of that form is on the Schedule A page. The state and local tax line, which sits on the same schedule, is covered on the 2026 SALT cap page.
Box 1 is a single total for the mortgage, but a loan can have more than one borrower. The form says the person who got the statement should pass information on: “furnish each of the other borrowers with information about the proper distribution of amounts reported on this form.” “Each borrower is entitled to deduct only the amount each borrower paid”. Pub. 936 gives the matching instruction to the payer of record: “deduct only your share of the interest on Schedule A (Form 1040), line 8a.” If you paid interest that is not in box 1, the same publication says to deduct it on a different line: “Deduct home mortgage interest that wasn’t reported to you on Form 1098 on Schedule A (Form 1040), line 8b.”
Edition and box numbers
The primary read for this page is Form 1098 (Rev. April 2025), Copy B, with its Instructions for Payer/Borrower, together with the Instructions for Form 1098 (Rev. April 2025) that speak to the lender. irs.gov was serving a newer set of instructions, the December 2026 revision, on 2026-10-17. Those instructions describe how the form is used going forward: “Use the April 2025 revision of Form 1098 and these instructions to file 2026 information with the IRS in early 2027.” In other words, the form itself was still the April 2025 revision on that date, and the form text served that day read the same as the April 2025 text when the two were compared line by line.
Box 1 is box 1 on both revisions of the instructions, and the wording of the box 1 entry for the lender is the same in the April 2025 and December 2026 instructions. The December 2026 instructions present the cooperative housing note as a labelled tip rather than a boxed one; that is a formatting difference only. Check the tax year printed on the Form 1098 you received, and check whether the corrected box is marked, before relying on any number.
Common mistakes
- Deducting the box 1 number as if it were the deduction. The form warns that “The amount shown may not be fully deductible by you.”
- Forgetting prepaid interest that falls into the next year. The form says “you cannot deduct the prepaid amount in the calendar year paid even though it may be included in box 1.”
- Treating every loan secured by the house the same way. The instructions limit it: “you can only deduct the interest paid on acquisition indebtedness”.
Related: Form 1098 overview, Schedule A (Form 1040), the 2026 SALT cap, and Form 1040.
Sources
- Form 1098 (Rev. 4-2025) with Instructions for Payer/Borrower: IRS archived PDF (irs.gov)
- Instructions for Form 1098 (Rev. April 2025): IRS archived PDF (irs.gov)
- Instructions for Form 1098 (Rev. December 2026): https://www.irs.gov/pub/irs-pdf/i1098.pdf
- Publication 936, Home Mortgage Interest Deduction (for 2025 returns): https://www.irs.gov/pub/irs-pdf/p936.pdf
Read from the IRS documents linked above on October 17, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.