“Can I take the deduction in 2012 for the VA Funding fee applied in 2008, since that mortgage has been paid off?”========>No; you need to file amended 2008 return , not 21012 return, to claim VA funding fee applied in 2008 ; the VA funding fee is tax deductible. However, the borrower must have closed on his loan in 2008 to take the deduction;however, The IRS limits the amount of time you have to request a refund for an overpayment of tax. Refund requests for tax years that you did not file a tax return will be rejected. You must file a claim for a tax refund by the later of three years from the date you file the tax return or within two years of paying the tax. If you do not make the claim within this time frame, the IRS has the authority to reject the refund request.