The Form 1098-T is provided by colleges and universities for the purpose of determining a student's eligibility for education tax credits.
In previous years, your 1098-T included a figure in Box 2 that represented the qualified tuition and related expenses (QTRE) we billed to your student account for the calendar (tax) year. Due to a change to institutional reporting requirements under federal law, beginning with tax year 2018, we will report in Box 1 the amount of QTRE you paid during the year.
Depending on your income (or your family’s income, if you are a dependent), whether you were considered full or half-time enrolled, and the amount of your qualified educational expenses for the year, you may be eligible for a federal education tax credit. (You can find detailed information about claiming education tax credits in IRS Publication 970, page 9.)
The dollar amounts reported on your Form 1098-T may assist you in completing IRS Form 8863 – the form used for calculating the education tax credits that a taxpayer may claim as part of your tax return.
The 1098T is also used to determine if Scholarships and Grants are Taxable? The general rule of thumb is: if you are a degree-seeking student and your scholarship or federal grant was used to pay tuition, to buy required books and to purchase other required materials, you do not pay taxes on those funds. When scholarships and grants exceed these costs, the amount is taxable. You should report any taxable portion of these funds on a federal tax form. IRS Publication 970 includes a worksheet to help you calculate any tax responsibilities or benefits, IRS Publication 970.
Please Note: The Tax Reform Act of 1997 provided taxpayers/students with Hope Scholarship and Lifetime Learning tax credit opportunities. As part of that act, the Form 1098-T Tuition Statement is sent to students in late January and to the IRS at the end of March every year.
Your Form 1098-T will include the following information if applicable:
Box 1. Shows the total payments received by an eligible educational institution in 2020 from any source for qualified tuition and related expenses less any reimbursements or refunds made during 2020 that relate to those payments received during 2020.
Box 2. Reserved.
Box 3. Reserved.
Box 4. Shows any adjustment made by an eligible educational institution for a prior year for qualified tuition and related expenses that were reported on a prior year Form 1098-T. This amount may reduce any allowable education credit that you claimed for the prior year (may result in an increase in tax liability for the year of the refund). See “recapture” in the index to Pub. 970 to report a reduction in your education credit or tuition and fees deduction.
Box 5. Shows the total of all scholarships or grants administered and processed by the eligible educational institution. The amount of scholarships or grants for the calendar year (including those not reported by the institution) may reduce the amount of the education credit you claim for the year. TIP: You may be able to increase the combined value of an education credit and certain educational assistance (including Pell Grants) if the student includes some or all of the educational assistance in income in the year it is received. For details, see Pub. 970.
Box 6. Shows adjustments to scholarships or grants for a prior year. This amount may affect the amount of any allowable tuition and fees deduction or education credit that you claimed for the prior year. You may have to file an amended income tax return (Form 1040X) for the prior year.
Box 7. Shows whether the amount in box 1 includes amounts for an academic period beginning January–March 2020. See Pub. 970 for how to report these amounts.
Box 8. Shows whether you are considered to be carrying at least one-half the normal full-time workload for your course of study at the reporting institution.
Box 9. Shows whether you are considered to be enrolled in a program leading to a graduate degree, graduate-level certificate, or other recognized graduate-level educational credential.
Box 10. Shows the total amount of reimbursements or refunds of qualified tuition and related expenses made by an insurer. The amount of reimbursements or refunds for the calendar year may reduce the amount of any education credit you can claim for the year (may result in an increase in tax liability for the year of the refund).
Future developments. For the latest information about developments related to Form 1098-T and its instructions, such as legislation enacted after they were published, go to www.irs.gov/Form1098T.
When You Should Consult A Tax Professional:
Anderson University is unable to provide you with individual tax advice, but should you have questions, you should seek the counsel of an informed tax preparer or adviser.
IRS Online Resources:
You can find helpful information directly on the IRS website to help determine eligibility when preparing your taxes:
How to obtain a copy of your 1098T:
- To obtain a copy of your 1098-T navigate to the Heartland ECSI website.
- Select the first box “Want to look up your 1098-T or 1098-E tax form?”
- Enter the requested information
- Select the + beside the status for 1098-T Statement
- From here you can view and/or print your 1098-T