Form 1098-T, is an American IRS tax form filed by eligible education institutions (or those filing on the institution’s behalf) to report payments received from the paying student during the calendar year. This form, in conjunction with personal financial records, is used to assist you and your parents in calculating any educational tax credits you may be eligible for.
To help determine the tax credit you may be eligible for, please review IRS Form 8863 – Education Credits, Instructions for Form 8863, and IRS Publication 970 – Tax Benefits for Higher Education.
For more information, please visit the IRS website.
Colleges and universities use the IRS form to report the total dollar amount a student or their parents paid for qualified tuition and expenses during the tax year. Schools are supposed to give a Form 1098-T to students by January 31 of the calendar year following the tax year in which the expenses were paid.
Here’s what to know about this form and what to do with it when you file your federal income tax return.
There are some instances when your college doesn’t need to send a 1098-T, including …
· A course you took didn’t offer an academic credit
· You’re a nonresident alien
· Your school waived your tuition and expenses, or they were covered entirely by scholarships
· An employer or a government agency, like the Department of Veterans Affairs or the Department of Defense, covered your tuition and expenses entirely
If you believe you should have received a 1098-T but didn’t, it’s a good idea to reach out to your school and check the email address the school has on file.
Higher education isn’t cheap, but certain tax breaks can help defray the costs of getting a college degree. If you receive a Form 1098-T, it’s important to know what to do with it. The information on your 1098-T could help you claim valuable education credits. You can learn more about tax benefits for education in IRS Publication 970.
The IRS uses these forms to match data from information returns to income, deductions and credits reported on individual income tax returns. So, if a taxpayer claims an education credit on their federal income tax return and the IRS doesn’t have a 1098-T in its system for them, then the IRS could follow up with that taxpayer to ensure they’re actually eligible for the credit.
Educational institutions that are eligible to participate in the Department of Education’s student aid programs can issue Form 1098-T, including colleges, universities, vocational schools, and other eligible post-secondary education institutions.
Colleges, universities and other institutions that issue Form 1098-T are required to provide a copy of the form to the student by January 31st of the year following the tax year in which the expenses were paid. So, a 1098-T for tuition paid in 2021 is supposed to be in the student’s hands by January 31, 2022. If you, or your parents, have paid qualified tuition expenses during the tax year, you will receive an email with a link to access your Form 1098-T online by January 31, 2022.
The form isn’t due to the IRS until March 31st when filed electronically. This way, if a student receives an incorrect 1098-T, they could have time to contact the college or university and request a correction before the school sends the information to the IRS.
Form 1098-T doesn’t have a minimum threshold. Schools are required to issue this form if you paid any qualified education expenses, like tuition, fees or course materials that are required for enrollment – with some exceptions
Form 1098-T is a relatively short form — it has 10 numbered boxes plus basic identifying information.
Here’s what’s included in each box used by CIU:
· Filer information: On the left side of the 1098-T, the school issuing the form includes its name, address, telephone number and tax identification number. There’s also a box to include the student’s account number.
· Student information: Also on the left side of the form are boxes for the student’s name, address and tax identification number (like a Social Security number).
· Box 1: This box shows the total amount of all payments the school received from you for qualified tuition and related expenses during the calendar year — minus any refunds or reimbursements.
· Boxes 5: This box shows scholarships or grants that the school processed and applied to your tuition during the tax year.
· Box 8: If you’re enrolled at least half-time during any academic period that began in the calendar year, the school should check this box.
· Box 9: This box indicates whether you were a graduate student.