The 1098-T form reports information on what you were billed in tuition expenses at a college or university. All colleges and universities are required by the IRS to provide you with this information.
The form provides the details that can help you or your parents claim a tax credit for the tuition expense for higher education. A tax credit is different from a deduction. A deduction reduces the amount of income you have to pay tax on. A credit reduces the final amount of income tax you need to pay.
Two sources of credits are available, but you can only claim one. The Lifetime Learning Credit allows you to claim up to a $2000 credit on your income tax and the American Opportunity Credit allows you to claim a $2,500 credit.