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What is a 1098-T Form?

The 1098-T Tax form is a form eligible colleges or other post-secondary institutions send to students who in the previous tax year paid “qualified educational expenses”.

What are Qualified Education Expenses?

Qualified education expenses can include tuition, required fees, and required course materials.

What is considered an eligible college or post-secondary institution?

Eligible colleges or post-secondary institutions in this context refers to most college, universities and vocational schools which are also eligible to participate in student aid programs through the Department of Education.

How Does This Work?

Every year, tuition-paying students at these institutions will be sent a 1098-T form to use when filing their taxes with the IRS. The information about educational expenses in this form is used during tax preparation to determine if the student, or parent of a dependent student, qualifies for education-related tax credits. This form must be sent to the student by January 31^st and a copy must be filed with the IRS by February 28^th.

What About Scholarships and Financial Aid?

Boxes 4, 5 & 6 pertain to adjustments and scholarships. Box 4 will show any adjustments the school has made to qualified expenses from a previous year. Box 5 shows the amount of scholarships and grants that were paid directly to the school. This number can reduce the amount of qualified expenses for the tax year. Box 6 is a bit of both in that it shows any adjustments made on a previous year to the scholarships and grants that were reported. This could potentially cause the student to be required to file an amended return for the previous year.

What Are The Other Boxes?

Boxes 7-9 are check boxes that should be marked by the school if the following conditions are met. Box 7 will be checked if the amounts in Box 1 or Box 2 include expenses for an Academic Term beginning in the first 3 months of the year following the 1098-T’s information (such as a Winter or Spring term). Box 8 will be checked if the student is enrolled at least half-time. Box 9 will be checked if the student is enrolled in a graduate program for that year.

What Does Box 10 Mean?

Box 10 will be checked if the student had their expenses reimbursed due to a tuition insurance policy. Tuition insurance may reimburse students when they are forced to withdraw from school due to an unforeseen accident, injury or other covered reason. Since tuition insurance may reimburse the student for tuition, fees and other expenses such as room & board, this would adjust the total amount of expenses the student was responsible for paying during that academic year.