1098 T Form Explained: What Students Need to Know
If you’re a college student or a parent paying for education, knowing about your tuition statement is key. The 1098 T Form is an official IRS document that schools send out each year. It shows payments for tuition and related costs, plus any scholarships or grants you got.
Colleges, universities, and trade schools must send this document. It helps you and the IRS figure out if you can get education tax credits.
Schools usually make this statement available by January 31 each year. It covers the financial activity from the last calendar year, from January 1 to December 31. Keeping this document organized is very important when you file your taxes. It has the info you need to claim education tax benefits and save a lot of money.
Key Takeaways
- The 1098-T is an IRS tuition statement issued by eligible colleges and universities to help students claim education tax credits
- Educational institutions must provide this document by January 31 for the previous calendar year’s qualified tuition and expenses
- Information on this statement helps determine eligibility for the American Opportunity Tax Credit and Lifetime Learning Credit
- The document reports both payments received for qualified expenses and scholarships or grants awarded during the year
- Understanding your tuition statement is essential for maximizing tax savings when filing your federal tax return
What Is a 1098-T Form Used For?
Your school sends Form 1098-T to help you get tax credits worth thousands. This form tracks your tuition payments and any scholarships or grants. The IRS uses it to check if you qualify for education tax benefits.
Knowing what is a 1098-t form used for can greatly help your taxes. Many students and families miss out on credits because they don’t understand the form. This section explains everything you need to know about this important tax document.
The Purpose Behind Your Tax Form
Form 1098-T reports two key things. First, it shows payments for qualified tuition and related expenses. Second, it lists scholarships and grants you got during the same time.
You and the IRS both get copies of this form. This makes a system where the government can check the tax credits you claim. Your school usually sends the form by January 31st for the last calendar year.
The form helps you figure out if you qualify for two big tax credits. The American Opportunity Tax Credit gives up to $2,500 per eligible student for the first four years of higher education. The Lifetime Learning Credit offers up to $2,000 per tax return for any level of postsecondary education.
Students Who Receive This Document
Not every student gets Form 1098-T. Your school only gives it out if you had a reportable transaction in the calendar year. This means you paid for qualified educational expenses or got scholarships and grants that the school must report.
To get the form, you must be at a school that qualifies for federal student aid. This includes most colleges, universities, and vocational schools. The school must be accredited and recognized by the Department of Education.
A reportable transaction usually means payments for tuition, fees, and course materials. But, room and board, transportation, insurance, or optional fees don’t count. These won’t show up on your Form 1098-T.
Students taking courses for credit toward a degree or credential usually get the form. It’s not about how many hours you study, but if you had qualifying financial activity. Both full-time and part-time students can get Form 1098-T if they meet the requirements.
Financial Aid and Your Form Eligibility
Many students wonder: do I get a 1098-t form if I get financial aid? The answer depends on your financial situation. Getting financial aid doesn’t mean you won’t get the form, but certain situations might affect it..
Here are the main scenarios where schools don’t have to give out Form 1098-T:
- Your qualified tuition and related expenses were entirely waived by the institution
- Scholarships and grants completely covered all your qualified educational expenses
- A formal third-party billing arrangement paid all your expenses directly
- You’re classified as an international student for tax purposes
- You only took courses that don’t offer academic credit, even if enrolled in a degree program
If scholarships or grants fully cover your qualified expenses, you may not receive Form 1098-T. However, students with partial aid usually do. For instance, if scholarships pay half your tuition and you cover the rest, your school will issue the form.
| Student Situation | Form 1098-T Required | Tax Credit Eligibility | Documentation Needed |
|---|---|---|---|
| Paid tuition with personal funds | Yes | Likely eligible | Form 1098-T, receipts |
| Partial scholarship, paid remainder | Yes | Eligible for amount paid | Form 1098-T showing both amounts |
| Full scholarship covering all expenses | No | Generally not eligible | Scholarship award letter |
| Third-party billing (employer pays) | No | Not eligible | Employer documentation |
| International student status | No | Varies by tax status | Visa documents, payment records |
Not getting Form 1098-T doesn’t mean you can’t claim education tax credits. You can claim credits if you’re eligible, but you’ll need other documents. Keep detailed records of your tuition payments, fee receipts, and scholarship award letters.
If you have questions about your situation, contact your school’s financial aid or bursar’s office. This helps you prepare accurate tax returns and claim all the credits you deserve.
What Information Is Included on a 1098-T Form?
Your 1098-T form shows important financial details in different boxes. Each box has a special purpose for tax reporting. It covers everything from tuition payments to scholarships, giving a full view of your education costs. Knowing what’s on your 1098-T helps you file taxes right and get all education benefits you can.
Each box on the form has its own financial data. Your school sends this info to you and the IRS. This ensures your tax return is accurate. The form covers a calendar year, from January 1 to December 31.
Breaking Down the Key Boxes on Your 1098-T
The 1098-T form has nine main boxes for your education finances. Three of these are key for tax benefits. Let’s look at each one to understand the numbers.
Box 1 shows the total amount of payments received by your school for qualified tuition and related expenses in the calendar year. This includes payments from all sources, like cash, loans, or parent payments.
The calculation adds all payments received and subtracts any refunds in the same year. But, it doesn’t subtract scholarships and grants, which are in Box 5.
For example, if you paid $10,000 in tuition and $500 in fees in 2024, and got a $300 refund in March, Box 1 would show $10,200. This is $10,500 total payments minus the $300 refund.
Box 1 only counts payments up to the maximum qualified expenses. If you paid for housing or meal plans, those aren’t included. Only payments for eligible expenses count.
Box 4: Adjustments Made for Prior Year
Box 4 shows reductions or adjustments made to amounts from a previous year’s 1098-T form. It helps fix any mistakes from earlier tax filings.
An amount in Box 4 might be seen if your school corrected billing after last year’s form. For example, if you got a scholarship or billing adjustment that lowered your 2023 qualified expenses, that reduction would show in Box 4 on your 2024 form.
This info is key because you might need to change your previous year’s tax return. If your expenses were reduced, you must correct your filing with the IRS.
Box 5: Scholarships and Grants
Box 5 reports the total amount of scholarships, grants, and third-party sponsor credits processed in the calendar year. This includes federal Pell Grants, state grants, and scholarships from your school.
Consider this: If Box 1 shows $8,000 in payments and Box 5 shows $5,000 in scholarships, your net qualified expenses for tax credits would be $3,000. But, if your scholarship covered tuition and gave you $2,000 for living expenses, that $2,000 could be taxable.
The timing of scholarships matters. Box 5 only includes amounts processed in the calendar year, even if they were awarded for a different academic period.
Reading and Interpreting Your Form Correctly
Beyond the three main boxes, your 1098-T includes other important indicators. Box 6 shows adjustments to scholarships or grants from a prior year, like Box 4 for payments.
Box 7 has a checkbox for payments made for an academic period starting in the next calendar year. If this box is checked, you must decide whether to claim those expenses in the current tax year or wait until next year.
Box 8 is checked if you were enrolled at least half-time (typically six credit hours) for at least one academic period during the year. Box 9 is marked if you were a graduate student for any academic period. These enrollment status indicators affect your eligibility for certain tax benefits.
Your 1098-T form is a key part of tax filing, but it’s not everything. You might need to look at your student account statements and personal receipts for books and supplies to get all education tax benefits.
How Do I Get My 1098-T Form Online?
Getting your Form 1098-T is now easy with most schools sending it online. Every year in mid-January, schools send out Form 1098-T to eligible students. Knowing how to get it quickly helps when you’re preparing your taxes.
Students can get their tax forms in different ways, depending on what their school offers. Here’s how to do it.
The main way to get your 1098-T form is through your school’s online portal. Most colleges and universities send tax documents online. This way, you get it right away without waiting for the mail.
To get your form online, follow these steps:
- Log into your student account portal using your school’s login info
- Navigate to the financial section, often called “Bursar,” “Student Accounts,” or “Financial Services”
- Locate the tax documents area, which might be under “Account Statements,” “Tax Forms,” or “1098-T Forms”
- Select the right tax year and download the PDF statement
Parents and guardians need special permission to see your 1098-T form. While they can see payment info online, you must give them permission to see your 1098-T. This is because of privacy laws.
To set up permission for parents or guardians:
- Log into your student portal and find the authorized user settings
- Add your parent or guardian as an authorized user with specific tax document permissions
- Complete any required verification steps your school asks for
Setting up these permissions early helps avoid delays when tax season comes. Then, parents can get the forms without bothering you every time.
Requesting a Paper Copy by Mail
Even though most schools send forms online, you can ask for a paper copy. Some schools send paper copies to students who don’t want to get them online or who haven’t given consent for electronic statements.
To ask for a paper copy by mail, contact your school’s bursar or registrar’s office. You can ask in several ways:
- Phone call to the bursar office during business hours
- Email request through your student email account
- In-person visit to the financial services office
- Online form submission through the school website
Processing times can vary based on your school’s policies. Some schools might charge a small fee for paper copies, and it may take a while to get them by mail.
Paper copies are official and have the same legal value as online versions. Students who file paper tax returns might find it easier to keep physical copies.
Timeline for Receiving Your 1098-T Form
Schools must give Form 1098-T to eligible students by January 31 each year for the previous year’s qualified expenses. This rule helps students get the form on time for their taxes, which are usually due in April.
If you think you should have a Form 1098-T but can’t find it by early February, act fast. Contact your school’s bursar office to check if you’re eligible and to fix any technical issues.
Keep digital or physical copies of your Form 1098-T for at least three years after filing your taxes. These records are important if you need to prove your education tax credits during IRS reviews.
Form 1098-T Instructions: Using Your Form to Claim Education Tax Credits
Learning about form 1098-t instructions can save you money on taxes. Your 1098-T is key for claiming tax credits on your federal return. This includes the American Opportunity Tax Credit and the Lifetime Learning Credit.
The Lifetime Learning Credit lets you claim up to $2,000 per tax return for any college level. It’s great for graduate students or those learning part-time. You can claim it every year without limit.
To get either credit, fill out Form 8863 and attach it to your tax form. Move info from your 1098-T to Form 8863. Also, keep receipts for books and supplies. These might not be on your 1098-T.
If someone else claims you as a dependent, they’re the only one who can use your education expenses for credits. For more help, check IRS Publication 970 or talk to a tax expert.
FAQ
What is a 1098-T form used for?
Form 1098-T is an official IRS tax document. It reports payments for qualified tuition and related expenses. It also shows scholarships and grants received during a calendar year.This form helps determine eligibility for education tax credits. It’s important for taxpayers and the IRS. Educational institutions send it to both the student and the IRS.
Do I get a 1098-T form if I get financial aid?
Many students with financial aid get a 1098-T form. But, there are exceptions. You won’t get one if your tuition is fully covered by scholarships or grants.It’s also not sent if you’re an international student or if courses don’t offer academic credit. Not getting a form doesn’t mean you can’t claim education tax credits. You might need other documents for your tax return.
What information is included on a 1098-T form?
The 1098-T form has several boxes with financial information. Box 1 shows total payments for qualified tuition and related expenses. Box 4 has any adjustments to previous year’s expenses.Box 5 reports scholarships, grants, or sponsor credits. Other boxes include information on enrollment status and graduate student status. The form also has the institution’s and student’s details.
How do I get my 1098-T form online?
Most colleges and universities provide Form 1098-T online. Log into your student account portal to find it. The path varies by institution.If a parent needs access, you must give them permission. Check your school’s website for instructions. Contact the bursar office if you can’t find your form.
When will I receive my 1098-T form?
Educational institutions must provide Form 1098-T by January 31 each year. This allows students and families to prepare their tax returns. The IRS receives the information by March 31.Students should check their online portals in mid-to-late January. Contact the bursar office if you haven’t received your form.
What expenses qualify as “qualified tuition and related expenses” on Form 1098-T?
Qualified expenses include tuition, fees, and course materials. They must be for a course of study at an eligible educational institution. Expenses like housing and meal plans don’t qualify.Required textbooks and supplies can be claimed even if not on the 1098-T. Keep receipts for these items.
Can I claim education tax credits if I don’t receive a 1098-T form?
Yes, you can claim education tax credits without a 1098-T form. If your institution wasn’t required to issue one, you can claim credits with alternative documentation. Keep detailed records of your expenses.Consult IRS Publication 970 for guidance. Consider a tax preparer if your situation is complex.
What is the difference between the American Opportunity Tax Credit and the Lifetime Learning Credit?
The American Opportunity Tax Credit is for the first four years of post-secondary education. It can provide up to $2,500 per student per year, with up to $1,000 refundable. The student must be enrolled at least half-time in a degree program.The Lifetime Learning Credit is for any level of post-secondary education or courses to improve job skills. It has no limit on years and is worth up to $2,000 per tax return. Both credits have income limits, with full credit available for single filers with modified adjusted gross income of $80,000 or less.
Who can claim education tax credits based on my 1098-T form?
If you’re claimed as a dependent, only that person can claim the education credit. If you’re not claimed as a dependent, you can claim it on your own tax return. Claiming the credit incorrectly can cause delays and IRS notices.Families should coordinate before filing to determine who will claim the student as a dependent and who will claim the education credits.
What should I do if the information on my 1098-T form is incorrect?
If your 1098-T form is incorrect, contact your school’s bursar office or registrar’s office immediately. They can issue corrected forms if errors are found. Common mistakes include incorrect amounts in Box 1 or Box 5, or missing information about enrollment status.Keep in mind that the 1098-T reports information on a calendar-year basis. This may not align with your academic year. Compare the form with your personal account statements and receipts. Report the actual amounts you paid for qualified expenses when filing your tax return.
How do I use Form 1098-T when filing my taxes?
To use Form 1098-T when filing your federal income tax return, transfer relevant information from your 1098-T to Form 8863 (Education Credits form). Form 8863 is where you calculate your American Opportunity Tax Credit or Lifetime Learning Credit. After completing Form 8863, attach it to your Form 1040 or Form 1040-SR.You will need information from Box 1 (payments received for qualified expenses) and Box 5 (scholarships and grants) on your 1098-T. Many tax preparation software programs guide you through this process. Keep your 1098-T form and all supporting documentation for your records.
Can I request a paper copy of my 1098-T form if my school only provides it electronically?
Yes, while electronic delivery is standard, students can request a paper copy. Contact your school’s bursar office for instructions. There may be a processing time and possibly a small fee at some institutions.Paper copies may be automatically mailed to students who opt out of electronic delivery. The deadline for institutions to provide the form remains January 31, regardless of delivery method.
