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What is Form 1098-T

1098-T Tax Form also known as a Tuition statement, is an information document provided by educational institutions to enrolled students to report the amount of eligible tuition and related expenses during the calendar year. Institutions are required to report IRS that payment received from students during the year. Under the Education Act of 1965, Eligible Educational Institutes (EEI) are colleges, universities, vocational schools, or other postsecondary institutions. Students can receive a Form 1098-T from any eligible educational institution where they are enrolled in courses or programs that award credits toward a degree, certification, or other recognized postsecondary educational credential.

Only qualified tuition and expenses can be reported on Form 1098-T, they include:

  • Necessary for fees for attendance
  • Books
  • Other course materials required for a student to be enrolled
1098-T

Expenses from any hobbies, sports, courses not related to a degree program or improving related job skills are not included. Amounts paid for room and board are also excluded.

Form 1098-T Exceptions:

Tax Filer does not have to file Form 1098-T or furnish a statement for:

  • If payments are for courses for which no academic credit is offered, even if the student is otherwise enrolled in a degree program.
  • If the enrolled student is a non-resident alien unless requested by the student.
  • Students whose qualified tuition and related expenses are entirely waived or paid entirely with scholarships.
  • Students for whom they do not maintain a separate financial account and whose qualified tuition and related expenses are covered by a formal billing arrangement between an institution and the student’s employer or a governmental entity, such as the Department of Veterans Affairs or the Department of Defence.

How to E-File Form 1098-T with IRS?

1098 T Form
Information required to file Form 1098-T
  • Filer’s Information
  • Student’s Information
  • Account number
  • Scholarship & Tuition expenses details

Watch our step-by-step video on How to E-File IRS Form 1098-T with Tax2efile

Form 1098-T Instructions:

  • Box 1: Payments Received for Qualified Tuition and Related Expenses
  • Box 2: Reserved
  • Box 3: Reserved
  • Box 4: Adjustments Made for a Prior Year
  • Box 5: Scholarships or Grants
  • Box 6: Adjustments to Scholarships or Grants for a Prior Year
  • Box 7:Checkbox for Amounts for an Academic Period Beginning in January Through March of 2023
  • Box 8: Check if at Least Half-Time Student
  • Box 9: Check if a Graduate Student
  • Box 10:Insurance Contract Reimbursements or Refunds

Who Needs to File 1098-T Form?

An eligible educational institution is a governmental unit or agency or instrumentality of a governmental unit, that is subject to the reporting requirements of Form 1098-T.

If another person receives or collects payments of qualified tuition and related expenses on your behalf, then that other person must file Form 1098-T.

Amount from any scholarships or grants administered and processed by you or your business during the calendar year for the payment of the student’s costs of attendance must also be reported.

In addition, any insurer engaged in a trade or business involved in making refunds or reimbursements of qualified tuition and other related expenses is required to file Form 1098-T.

When is the Due Date to File the 1098-T Tax Form?

Filing Type Deadline
Recipient copy January 31st
IRS Paper Filing February 28th
IRS Electronic Filing March 31st

Note:If the due date/deadline falls on a Saturday, Sunday, or federal holiday, the filer will need to E-file on the next business day.

Form 1098-T and Education Tax Credits:

Education Tax Credits are used to reduce your tax liabilities and help to offset the cost of higher education. Two types of education tax credits are available such as the American Opportunity Credit (AOC) and Lifetime Learning Credit (LLC). The American Opportunity Credit (AOC) is available for the first four years of postsecondary education and allows eligible taxpayers to receive claims up to $2500. The LLC is available for an unlimited number of years and allows eligible taxpayers to receive a wide range of educational expenses.

Still Have Questions?

Form 1098-T provides the total dollar amount paid by the student for qualified tuition and related expenses (or “QTRE”) in a single tax year.

You must file Form 1098-T if you are an eligible educational institution. An eligible educational institution that is a governmental unit, or an agency or instrumentality of a governmental unit, is subject to the reporting requirements of Form 1098-T. A designated officer or employee of the governmental entity must satisfy the reporting requirements of Form 1098-T

Details needed to file Form 1098-T are: Filers & Students Name, Address, TIN, Payments received, adjustments made for a prior year, Scholarships/Grants amounts or any adjustments.

Tax2efile allows you to correct a mistake to the recipients’ information for TINs, Names & amounts.

Yes, Tax2efile offers printing and mailing service! Our dedicated team will print and mail out each form you filed.

Using our fast electronic service, you can complete your filing within 5 minutes.

To file Form 1098-T for a single return the filing fee is $3.25.

The IRS requires Form 1098-T to be submitted by February 28 through the mail and by March 31 if you file the form electronically however, recipients’ copy should be mailed by January 31.

The penalty can be from $50 per 1098 form, the maximum penalty can be up to $194,000. The penalty increases to $100 per 1098 form if you submit more than 30 days after the due date, but by August 1; the maximum penalty is $556,500. If you file after August 1, the penalty increases to $280 per 1098 form, with a maximum of $3,392,000. Additionally, there are penalties for failure to furnish the payee statement.

If you have more questions, please refer to our FAQ page.

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