Your PMI Is Deductible Again in 2026. If Your AGI Is Under $110K, Track Every Payment Now.

If you put less than 20% down on your home and pay mortgage insurance every month, the tax code just handed you back a deduction that vanished five years ago. Log your payments now. Your future tax return will thank you, if your household income sits under the cap.

Buried in the One Big Beautiful Bill Act that President Trump signed on July 4, 2025 is a line that makes the mortgage insurance premium deduction permanent, for premiums paid on or after January 1, 2026. Private mortgage insurance on a conventional loan counts. So does FHA mortgage insurance premium. So does the VA funding fee. So does the USDA guarantee fee. If it hits the insurance box on your monthly statement, it goes on Schedule A.

The deduction has a history. From 2007 to 2021 it was a rider Congress kept renewing at the last minute every couple of years. The average taxpayer who claimed it deducted about $1,454 a year, according to U.S. Mortgage Insurers, the trade group that tracks it. In 2021, the final year before it expired, the average deduction was $2,346. Then it lapsed, and for four filing seasons, homeowners paying PMI got nothing for it.

Here’s the catch. The income phaseout Congress wrote in 2007 is still on the books, unchanged. Your full deduction starts phasing out at $100,000 in adjusted gross income ($50,000 if you file married separately). You lose 10% of the deduction for every $1,000 over. At $110,000 AGI ($55,000 MFS), you get nothing. USMI is lobbying Congress to raise that ceiling. It has not moved.

Here’s what the math looks like on your kitchen table. Your household brings in $95,000 and pays $200 a month in PMI, a common range for a conventional loan with less than 20% down. That is $2,400 on Schedule A. In the 22% federal bracket, roughly $528 back on your 2026 return.

Bump the same household to $105,000 AGI and the phaseout cuts your deduction in half, to $1,200, worth about $264 in the same bracket. Still worth doing.

Bump it to $115,000 and you get nothing. Blame Congress, not the tax software.

Pull your mortgage servicer’s app this week. Find your year-to-date PMI, FHA MIP, or funding-fee payments. Note the number. In January, your servicer will send Form 1098 with the total in Box 5 or on the labeled mortgage insurance line. Verify what they report matches your ledger. If you itemize, put the number on Schedule A, Line 8d.

Most filers use the standard deduction and do not itemize. This one deduction alone probably won’t tip you over. But it can stack with state and local tax, property tax, and mortgage interest into a combined itemized return that beats the standard for the first time in years. Do the math before you file. If you bought recently at a 6% or 7% mortgage rate, your first-year interest deduction is doing most of the work; PMI is a genuine bonus on top.

If you’re wondering whether you should be paying PMI at all, use our mortgage payment calculator to run the numbers on a bigger down payment or PMI removal at 80% loan-to-value. And if you were quoted PMI on a recent purchase, check our best mortgage picks to see whether a lender-paid MI or higher-rate route was cheaper across the life of the loan.

The mortgage insurance deduction sits inside the same Schedule A section as your regular mortgage interest, but the two are separate lines. Your standard deduction for 2026 will land near $15,000 for single filers and $30,000 for married filing jointly. Do the itemize-versus-standard math with a tax pro or a free calculator before you file. The deduction only helps if itemizing beats the standard for your whole return.

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