Well, like most things in life, death, and taxes, the answer to that is complex. If you have yet to do your taxes from the years of the Great Recession, then the answer may be a “Yes”. Congress had authorized Private Mortgage Insurance, or PMI, to be deductible from federal taxes from 2007 to 2011. Surprisingly for Congress, they agreed to extend that same deduction retroactively for 2012 in the fiscal cliff deal (“H.R. 8″) reached on January 1, 2013. (2013 was also covered in that same legislation.)
The “Mortgage Debt Exclusion” expired at the end of 2013, which had previously allowed underwater home owners to exclude from taxable income the amount of any mortgage debt forgiveness granted to them by their lender.
If you are looking for a 2014 PMI deduction on your federal taxes you may be out of luck. Congress is doing what they have been lately, which is holding up good legislation so that they can shout past one another. Home owners can no longer deduct Private Mortgage Insurance premiums as interest.
For now, it appears the only action you can take to help get this PMI debt exclusion deduction extension ratified by Congress is the usual prescriptions you always hear for this sort of thing. Write your Congress person a paper letter and send it to them often.
For what it is worth, there is also a change.org petition that is taking signatures to implore Congress to extend mortgage debt relief for people with underwater mortgages. Follow the link below and make sure you sign up! (Congress can only be bothered when bad press forces them to act. Such is modern lawmaking…)
Hope this answer helps!