Important Information about Form 1098- T for Tuition Information
- The IRS Form 1098-T is an information form filed with the Internal Revenue Service.
- The IRS Form 1098-T that you received reports amounts billed to you for qualified tuition and related expenses, as well as other related information.
- You, or the person who may claim you as a dependent, may be able to take either the tuition and fees deduction or claim an education credit on Form 1040 or 1040A for the qualified tuition and related expenses that were actually paid during the calendar year.
What is on your 1098-T Form?
Box 1: Value in this box is not taxable income, it is money received for qualified tuition and related expenses. Do not add this amount to your taxable income.
Box 2: This is your qualified tuition paid. A portion of paid tuition is deductible (up to $2,500) from your Adjusted Gross Income (AGI). The deduction is a calculated percentage of the total qualified tuition; it is not the total amount of your tuition. This is the value that may (likely) be reduced by amounts in box 5.
Box 5: This box may be reported or partially reportable as income if the scholarship or grant money is unrestricted or for non-qualifying expenses. This amount may also lower the amount of education credits allowed.
Generally Army Tuition Assistance
Generally Army Tuition Assistance is treated the same as any other financial aid. The GI Bill and 9-11 GI Bill are not taxable and are not reported on any 1098-T form, or reported as income.
Pub 970 is the IRS publication that governs tax benefits and consequences relating to education expenses. The pub would be a good place to go to determine if your scholarships are paying for qualifying expenses or not.
Qualified Tuition and Related Expenses on 1098-T
Why isn’t there an amount in box 1 of 1098-T ?
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. Universities report 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.
Explanation of Form 1098-T Student Tuition Info
Lastly, remember that 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.