- At the time of pubilcation, U.S. tax law requires educational institutions to send students Form 1098-T. This form lists the amount the student paid for tuition and other qualified educational expenses, such as enrollment fees. Receiving the form does not mean you owe taxes on the amounts you paid; it simply provides information for the student's benefit if he wishes to claim an educational credit to reduce his taxes.
- The 1098-T form is not intended to provide all the information you need to claim a tax credit; it just lets you know that you may be eligible for such a credit. Do not rely solely on your 1098-T for making decisions regarding the tax credit. If the information on your 1098-T conflicts with your payment records for tuition and qualified expenses, use your records when claiming tax credits for educational costs.
- Educational institutions have a choice as to how they report information on Form 1098-T. They can either report all the payments that they received from you for the year, which they would report in Box 1, or all tuition and qualified expenses that they billed you for the year, which they report in Box 2. They cannot report both. If your 1098-T has an amount in Box 2 instead of Box 1, use your financial records to determine how much you paid for the year.
- If you paid for your classes completely via scholarships, grants or fellowships, you won't receive a 1098-T, as you did not make any payments that qualify for the tax credit. However, you may have to report your scholarship, grant and fellowship amounts on your 1040, as some of these forms of financial aid are taxable -- check with your tax professional for more information. If you paid your tuition yourself and did not receive a 1098-T, contact your school to ensure it has the right address on file for you.
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