What is the 1098-T form, and why are there amounts on the form when there haven't been any in the past?
The 1098-T form is used by eligible educational institutions to report information about their students to the IRS as required by the Taxpayer Relief Act of 1997. Eligible educational institutions are required to submit general student enrollment information and financial data for the corresponding tax year. Information included is student name, address, social security number or tax identification number, enrollment status, academic status, amount billed for qualified tuition OR amounts paid for qualified tuition (but NOT both), scholarship or grant amounts, and, if applicable, adjustments to prior year qualified tuition and/or adjustments to prior year scholarships.
Can I receive my 1098-T form electronically instead of waiting for it to be mailed?
Yes, consent must be given electronically. Click this link for instructions for accessing your 1098T: 1098T Process for Students via Touchnet Student Account Center (PDF)
Can my parents or taxpayer view and print my 1098-T?
Yes, if the student has setup the parent or taxpayer as an Authorized User to the student’s Account Center. Click this link for instructions on setting up an Authorized User. Setting up Authorized Users via Touchnet Student Account Center (PDF).
Who can claim an American Opportunity Tax Credit or Lifetime Learning Tax Credit or the Higher Education Tuition and Fees Deduction?
An eligible taxpayer may claim them. An eligible taxpayer may be the student or, if the student is a dependent for federal income tax purposes, the person (e.g., parent) claiming the student as a dependent. A student who is a dependent cannot claim the tax credits or deduction on his or her own tax return.
How do I claim a credit or deduction?
To claim a hope or lifetime learning credit, the eligible taxpayer should use IRS Form 8863. The tuition and fees deduction is claimed using IRS Form 1040A or on IRS Form 1040. Taxpayers do not need to itemize deductions on Schedule A, Form 1040, in order to claim the deduction. Whether the credits or the deduction are being claimed, the taxpayer's financial records serve as the official supporting documentation for calculating the amount being claimed. Additional information for calculating a credit or deduction can be found in IRS Publication 970, which is available at www.1098-T.com or www.irs.gov.
Can I claim a tax credit and the Higher Education Tuition and Fees Deduction in the same year?
Yes, provided that they are for different students. For each year that a student meets the eligibility requirements for the credit or deduction, his or her expenses may be used as the basis for one tax credit or deduction, but no more than one. If a student pays more than $2,500 in qualified tuition and related expenses during the calendar year, the taxpayer may not claim the American Opportunity (Hope) Credit for the first $2,500 of expenses and the Lifetime Learning Credit or Higher Education Tuition and Fees Deduction for the rest of the expenses for that student.
Why aren't there amounts in both boxes 1 and 2 on the 1098-T form?
Institutions may elect to report either the aggregate amount of payments received for qualified tuition and related expenses (box 1), or the aggregate amount billed for qualified tuition and related expenses (box 2) during the calendar year with respect to individuals enrolled for any academic period.
What educational expenses are considered as qualified tuition and related expenses?
Qualified tuition and related expenses are tuition and fees required for enrollment or attendance at an eligible educational institution that were paid on or after January 1 and on or before December 31 of the tax year. Generally, they do not include books, room and board, student activities, athletics (unless the course is part of the degree program), insurance, equipment, transportation, or other similar personal, living or family expenses. However, for the American Opportunity Credit the term “qualified tuition and related expenses” has been expanded to include course materials such as books, supplies, and equipment needed for a course of study whether or not the materials are purchased from the institution as a condition of enrollment.
Can I claim an American Opportunity Tax Credit or Lifetime Learning Tax Credit or the Higher Education Tuition and Fees Deduction in the same year that I take a qualified distribution from a Coverdell account (Education IRA) or 529 Savings Plan?
Yes, as long as the funds from the qualified distribution are not used to pay the same expenses used to calculate the education tax credit or deduction.
Can I claim an American Opportunity Tax Credit or Lifetime Learning Tax Credit or the Higher Education Tuition and Fees Deduction for qualified tuition and related expenses paid in advance of when the academic period begins?
Generally, the credit and deduction are available only for payments of qualified tuition and related expenses that cover an academic period beginning the same calendar year in which the payment was made. An exception, however, allows the taxpayer to claim a tax credit, if otherwise eligible, for payment of qualified tuition and related expenses made during the calendar year to cover an academic period that begins in January, February, or March of the following tax year. Consult a tax professional for tax return preparation advice.
I paid my qualified tuition and related expenses with student loans. Can I still claim an American Opportunity Tax Credit or Lifetime Learning Tax Credit or the Higher Education Tuition and Fees Deduction?
Yes. Loan funds should be considered in the same manner as cash payments when calculating an American Opportunity Tax Credit or the Lifetime Learning Tax Credit or the Higher Education Tuition and Fees Deduction. However, any scholarships, grants, or other non-taxable aid must be deducted from the amount of qualified tuition and related expenses paid.