Form 1098-T

Are you considering claiming an education tax credit like the American Opportunity or Lifetime Learning credits? 1098-T is what you must fill out.

Form 1098-T reports to you and the IRS the amount of qualified tuition and fees payments you or your parents made during a calendar year. The IRS uses this information to match with income, deductions, and credits reported on individual income tax returns. Eligible educational institutions must send this tax form to students and their parents or guardians who can claim an education tax credit. It is a requirement of the Taxpayer Relief Act of 1997. Many businesses that make certain types of reportable transactions, like lenders who provide mortgages, must file an information return with the IRS, like a Form 1098. Colleges, universities, career schools, and other eligible educational institutions also must issue 1098-T forms.

How to file Form 1098-T?

The 1098-T must contain the student’s identifying number, such as their Social Security Number or Individual Taxpayer Identification Number (TIN). The IRS requires that the institution report to both the student and the taxpayer the amount of qualified tuition and fees paid in a year. Students are encouraged to consult a tax professional about their situation before claiming any tax deduction or credit.

A 1098-T must also list any amounts received as scholarships or grants. While some information returns have minimum filing thresholds, such as loan interest, schools must issue a 1098-T for any expenses that may qualify for an education tax break, including tuition and fees, course materials required for enrollment, and some housing and meal costs.

How to Fill out Form 1098-T?

Form 1098-T has ten lines that require the institution’s tax information and student details. This includes the student’s name, address, and taxpayer identification number (similar to a Social Security number).

  • Box 1 contains the amount of qualified tuition and fees paid during the calendar year.
  • Box 2 shows any reimbursements or refunds the school received for expenses they reported in a previous year.
  • Box 4 contains any adjustments the school made to scholarships or grants reported in a previous year.
  • Box 5 lists the amounts of scholarships that the student received. These can be from the school, federal grants like SEOG or Pell Grants, or local rotary and foundation scholarships sent directly to the student.
  • Box 6 includes adjustments to scholarships or grants for a prior year.
  • Box 7 checkbox – includes amounts for an academic period beginning January– March 2025
  • The last two boxes on the form indicate whether the student was enrolled as a full-time or part-time student and whether the student is a graduate student. This helps the IRS to verify that the information is correct. The form also has a space for the student to sign and return it to the school. The IRS website provides some helpful instructions on completing the form.

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