Do you know what is a 1098 T form and what all are its benefits? If you don’t, it’s all right and completely fine! We will explain to you what it is in this guide and tell you where to find it exactly so that you can save expenses on your education.
If you are wondering where to find 1098 T form, this guide will come in handy as well. It has all the essentials you must know to submit your 1098 T form successfully without any chances of getting it rejected. This guide will also help you understand how you should add information to your 1098-T form correctly. Let’s read ahead!
What is Form 1098 T and Who Can Receive it?
Form 1098-T is issued by schools and colleges to students or parents to claim education credits paid for tuition or college expenses through the previous tax year. Must be issued to students by their school and colleges by Jan 31 following the year in which the expenses were made.
Students and their parents who wish to claim education credits can receive Form 1098-T.
What Sorts of Expenses are Qualified for the Claim?
The following expenses qualify for the claim:
- Tuition expenses
- Expenses on course materials that are required for the students to be enrolled.
- Any fees required for the student enrollment.
When Are 1098 T Forms Available?
If you are concerned about when do forms come out, the upcoming information is for you.
Colleges or institutions that release Form 1098-T should provide a copy of this form to their students by 31st January during the tax year in which students paid the expenses. Also, students should file a form copy with the Internal Revenue Service (IRS) by 28th February.
Remember that Form is not due to the IRS until 28th Feb by email or 31st March if you file electronically. This is to provide students enough time to make corrections in case they have received an incorrect form.
What All Information is There on Form 1098-T?
Form 1098-T has 10 numbered boxes that require different information. If you want to learn what is a 1098 T tax and how to file this, you can go through the following information. This will help you understand what these boxes’ information means.
- Filer Information: On the left, you will see the name, contact number, address, tax identification number of the school that is issuing the form. You will also find a box that has the account number of the students.
- Student Information: This box will be on the left. It includes the information of a student such as a name, tax identification numbers such as social security number, or address.
- Box 1: In this box, you will see the total amount of the payments that your university has got from you for the qualified tuition or college-related expenses throughout the calendar year excluding reimbursement or any refunds.
- Box 2 and Box 3: These boxes are no longer in use. Before 2018, the school used to get the report in one of two different ways. It depends on what amount the student has paid through the tax year or how much the university billed.
In 2018, schools or universities started using Box 1. This is to report payments that are received and the Box 2 was no longer in use.
On the other hand, in 2020, both Box 2 and Box 3 are not in use. However, both the boxes that remain on the 1098-T form are reserved for future purposes.
- Box 4: Your school or university is supposed to fill this box if there is any requirement to report the adjustment that is made in the previous year but after 2002, for example, refund issues in the year 2018 for the tuition that was paid in 2017.
- Box 5 and Box 6: In these boxes, you will see scholarships that your school processed and implemented to the tuition through the tax year. On contrary to this, Box 6 displays the adjustments that are made to grants and scholarships in the previous year but after the year 2002.
- Box 7: Your university will verify this box if there is any tuition you have paid for during the tax year (which is implemented to the academic period that usually begins in the first half-year). For example, the payment was prepared in December 2020 for your tuition for the college semester beginning in January 2021.
- Box 8: If the student is enrolled half-year throughout the academic period that started in the calendar year then your school or college should check this box.
- Box 9: This box tells if the student graduated.
- Box 10: This box can be used by insurers only who release refunds or reimbursements of the qualified tuition or college-related expenses.
Benefits of Filing 1098-T Form
When you are prepared to file the federal income tax return, you need to file this form(if you get the one by your university). This form helps you to calculate your valuable educational credits such as lifetime learning credit and American opportunity tax credit.
To Sum Up
The Form is issued by colleges or universities by 31 January for the students. The information that you report on your Form is used for claiming credits on the college’s students or their parent’s tax return. All you have to do is check if you are eligible for this form. After checking the requirement, you can file this form 1098-T.