In what is perhaps a reversal but might just be a clarification, home equity interest can be deducted– still. At first look, Heloc (Home Equity Line of Credit) interest was out in the new Tax Cuts and Jobs Act, however the IRS says differently. The IRS essentially stated that so long as the proceeds on the Heloc are used to buy, build or substantially improve the taxpayer’s home; then the Heloc interest is deductible. Please save your receipts.