What is a 1098-T?

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 the student's name, address, and taxpayer’s identification number (TIN), enrollment and academic status. Beginning with 2003, educational institutions must also report amounts to the IRS pertaining to qualified tuition and related expenses, as well as scholarships and/or grants, taxable or not. A 1098-T form must also be provided to each applicable student. This form is informational only. It serves to alert students that they may be eligible for federal income tax education credits. It should not be considered as tax opinion or advice. While it is a good starting point, the 1098-T, as designed and regulated by the IRS, does not contain all of the information needed to claim a tax credit. There is no IRS requirement that you must claim the tuition and fees deduction or an education credit. Claiming education tax benefits is a voluntary decision for those who may qualify.

 

Why did I receive a 1098-T and what am I supposed to do with it?

In January of each year, the University of Alaska Anchorage mails an IRS Form 1098-T to all students who had qualified tuition and other related educational expenses billed to them during the previous calendar year. This form is informational only and should not be considered as tax opinion or advice. It serves to alert students that they may be eligible for federal income tax education credits. Receipt of Form 1098-T does not indicate eligibility for the tax credit. To determine the amount of qualified tuition and fees paid, and the amount of scholarships and grants received, a taxpayer should use their own financial records.

NOTE: It is up to each taxpayer to determine eligibility for the credits and how to calculate them.

 

Did you send a copy of this form to the IRS?

Yes. Section 6050S of the Internal Revenue Code, as enacted by the Taxpayer Relief Act of 1997, requires institutions to file information returns to assist taxpayers and the Internal Revenue Service in determining eligibility for the Hope and Lifetime Learning education tax credits. Forms are mailed at the end of January of each year for the previous tax year.

 

What educational expenses are considered as qualified tuition and related expenses?

Included Not Included
  • Graduate and Undergraduate Tuition
  • Student fees
  • Residence Hall charges
  • Application fees
  • Transcript fees
  • Textbook charges to Wolfbucks student

For more information about qualified educational expenses please go to: http://www.irs.gov/publications/p17/ch35.html#d0e74760.

 

Why isn't there an amount in box 1?

The IRS instructs institutions to report either payments received (Box 1) or amounts billed for qualified tuition and related expenses (Box 2) on the 1098-T. Once an institution has selected one of these options, they cannot change reporting methods between calendar years without IRS permission. The University of Alaska reports qualified tuition and related expenses that were billed during the tax year (Box 2) and scholarships and grants, therefore, Box 1 – Payments Received for Qualified Tuition and Related Expenses, will be blank.

 

What are the Hope Credit and the Lifetime Learning Credit and what are allowable tuition and fee tax deductions for each?

For an overview of the Hope Credit, Lifetime Learning Credit, and allowable tuition and fee tax deductions visit http://www.irs.gov/faqs/faq/0,,id=199791,00.html. Not all students who pay qualified expenses are eligible for a tax credit. For example, both credits have an income cap. Students who have a Modified Adjusted Gross Income (MAGI) greater than or equal to $60,000, or $ 120,000 for those filing a joint return, are not eligible for the Hope or Lifetime Learning credit.

Chapter 35 of IRS Publication 17 provides a very clear explanation of the eligibility requirements and filing instructions for the Hope Credit and the Lifetime Learning Credit. You can access an electronic copy of this chapter at http://www.irs.gov/publications/p17/ch35.html. The information provided may help you determine if you may be eligible for a tax credit. If you are eligible for both, it will help you decide which to claim. Each student can only claim one of these tax credits per year. You are also prohibited from claiming a tuition and fees deduction and an education tax credit for the same student for the same year. Publication 17 includes a number of useful real-life examples. Publication 970 explains tax benefits for education: http://www.irs.gov/publications/p970/index.html.


 

What is the American Opportunity Credit?

This is a new education tax credit available for 2009 and 2010. The maximum credit per student is $2,500 and it is available for the first 4 years of postsecondary education. Forty per-cent of the credit is refundable for most taxpayers. Students cannot claim this credit if their MAGI is $90,000 or more ($180,000 or more if filing a joint return). For more information please visit http://www.irs.gov/publications/p17/ch35.html.

 

I paid my qualified tuition and related expenses with student loans. Can I still claim a Hope 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 a Hope 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. The credit is claimed in the year in which the expenses are paid, not in the year in which the loan is repaid.

 

If I pay college tuition and fees with a scholarship, can I claim an education credit on Form 8863 for those payments?

No. You cannot claim a credit for the amount of higher education expenses paid for by tax-free scholarships. For more information, please visit the IRS website.

 

How do I get a reprint of my 1098-T form?

If you did not receive a 1098-T due to a change of address, or you misplaced the form, you can print a duplicate via UAOnline. Please be advised that UA will not mail any duplicates.

To print duplicates:

  1. Log into the Secured Area of UAOnline
  2. Select the 'Student Services & Account Information' tab
  3. Select 'Student Account' from the list of services
  4. Select 'Tax Notification'


 

How can I get an itemized listing of my financial activity that is on my 1098-T form?

  1. Log into the Secured Area of UAOnline
  2. Select the 'Student Services & Account Information' tab
  3. Select 'Student Account' from the list of services
  4. Select 'Account Detail for Term(Semester)/Pay Term Balance'
  5. Add the scholarships and grant payments to use when preparing your taxes or print these summaries, attach to your original 1098T and bring to your tax preparer.