The IRS Form 1098-T: Tuition Statement is sent to students who pay tuition at a qualifying college or similar higher education institutions. Any college, university, or vocational school that participates in the Department of Education programs for student aid are qualified institutions. The Form 1098-T lists expenses related to education, and can help determine the student’s eligibility for deductions and tax credits related to tuition and education. If the student is categorized as a dependent, then the parents or guardians of the student may be granted eligibility for the credits and deductions.

When to Expect the Form 1098-T

Schools send the form to any student who was responsible for the payment of certain educational expenses, such as:

• Tuition
• Fees paid toward enrollment
• Materials related to specific courses that were purchased from the school

If a person other than the student paid for these expenses, like a parent or guardian, the student is still the one who receives the 1098-T. All schools need to send the form by January 31 of the next tax year.

How qualified Expenses are reported

There are two methods for reporting expenses a student incurred. The school can opt to report the amount a student actually paid, by listing the total in Box 1 of the form, or they can report how much they billed the student, as evident in Box 2.

Scholarships and other Adjustments

If a school has adjusted the qualifying expenses from a previous year’s 1098-T, it will be reported in Box 4.

Students who received grants or scholarships to help offset expenses will show an amount in Box 5. This amount may reduce the total qualifying expenses that can be used toward a credit or deduction.

Any amounts listed in Box 6 relate to adjustments made by the school to scholarship or grant reporting on a previous year’s 1098-T.

Important Information

Box 7 of the 1098-T refers to the amounts listed in Box 1 or 2, and whether they include an academic term that extends beyond the coverage time of the year’s 1098-T, rolling over into the first three months of the next year.

Box 8 is checked when a student is considered half time enrollment. Box 9 relates to graduate level students.

Some students may enroll in a tuition insurance policy which can cover some expenses if the student has to withdraw from the school for medical reasons or emergencies, and only after payment of tuition which can’t be refunded. In these cases, Box 10 will indicate the student has been reimbursed through this policy.