U.S. · Tax forms
Form 1098 box 4 Refund of overpaid interest.
A refund or credit of interest from an earlier year, and the cases where box 4 stays empty.
Box 4 reports the total refund or credit of a prior year’s overpayment of mortgage interest, in the year the lender makes it. A same-year overpayment and refund is not shown in box 4; box 1 is simply reduced instead.
Look it up
Result
When box 4 is used
| Case | Treatment | What the IRS instructions say |
|---|---|---|
| Refund of a prior-year overpayment | Box 4, current year | Reported on the Form 1098 for the year the reimbursement is made. No change is made to the prior year’s Form 1098. |
| Credit applied to this year’s payments | Box 4 and box 1 | The credit is still shown in box 4, and the box 1 interest received must include the credit. |
| Overpaid and refunded in the same year | Box 1 only | Not shown in box 4. Box 1 shows what the borrower actually paid after the refund. |
| Reimbursement under $600 | Usually not required | Not required to file merely to report a reimbursement under $600, unless $600 or more of mortgage interest was received that year from the borrower. |
| Interest paid on the reimbursement | Not on Form 1098 | Reported on Form 1099-INT, not Form 1098. |
Who reports it
Only the person who makes the reimbursement reports it. The instructions give the example of a lender that bought a mortgage on which interest was overpaid in an earlier year: the buyer, who makes the refund, files, as long as the earlier holder had to report that interest on a prior Form 1098. The refund can cover overpayments from more than one year and is reported as a single total.
The IRS example in brief
A lender received $5,000 of interest in the prior year and reported it. The interest actually due was $4,500, and the lender refunds the $500 overpayment in the current year. If it received $600 or more of interest from the borrower in the current year, box 4 shows $500 and the prior-year form is not changed.
Worked example
Jordan paid $12,000 of interest last year and the lender later finds only $11,400 was due. In the current year it credits the $600 against Jordan’s payments. Box 4 shows $600. Box 1 for the current year includes that $600 credit. If instead the overpayment had been found and refunded in the same year it happened, box 4 would be empty and box 1 would simply be lower. Names and amounts are made up.
More from this set
Related pages: 1098 Box 10, 1098 Box 2, 1098 Box 6, 1098 Box 5. The 1099-R box 7 lookup and W-2 box 12 lookup cover the same kind of question for those forms.
Sources
- Instructions for Form 1098 (Mortgage Interest Statement) (page header shows Rev. 12/2026; it says to use the April 2025 revision of Form 1098 for 2026 information): Reimbursement of Overpaid Interest and box 4 (Refund of Overpaid Interest). Read November 2, 2026.
IRS instructions as read on the date above; thresholds and revisions change. Names and amounts in worked examples are made up.
Frequently asked questions
What is box 4 on Form 1098?
The total refund or credit of a prior year’s overpayment of mortgage interest, reported for the year in which it is made.
Does the old Form 1098 get corrected?
No. The instructions say no change is made to the prior year’s Form 1098 because of the reimbursement.
Is a refund under $600 reported?
Not required by itself. A lender need not file just to report a reimbursement under $600 unless it otherwise has to file because it received $600 or more of mortgage interest that year.
What if I was refunded in the same year I overpaid?
Box 4 is not used. The lender shows only the interest the borrower actually paid in box 1.
Where is interest on the refund reported?
On Form 1099-INT, not on Form 1098, under the thresholds in the instructions.
Not tax advice
This page summarizes IRS instructions, which are written mostly for the people who file the form, and is not tax, legal or financial advice. The payer, a CPA or an enrolled agent can confirm what a box means for your return. Everything runs in your browser; nothing you enter is sent anywhere.