Qualified Expenses

Qualified expenses are tuition, fees, and course materials.^[1] They are not:

Payment for sports, games, or hobbies;
Room and board;
Insurance;
Medical expenses;
Transportation; and
Personal expenses.

Previous Versions

2023 IRS Form 1098-T

Download: PDF

Who Uses a 1098-T?

Eligible educational institutions file Form 1098-T for every student who paid tuition and related expenses in the tax year. There is no minimum threshold, so all dollar amounts should be reported, however small.

Form 1098-T need not be filed for:

Courses for which no academic credit is offered;
Nonresident alien students;
Students whose tuition and expenses are covered by scholarships; and
Students whose tuition and expenses are covered by agreement with the student’s employer or a government entity, such as the Department of Defense.^[2]

An eligible educational institution is a college, university, vocational school, or other postsecondary educational institution.^[3]

A representative of the institution files Form 1098-T with the IRS and then sends a copy of the form to the student to whom it applies. Insurers who make refunds or reimbursements of qualified tuition and related expenses also file Form 1098-T.

Deadlines

The deadline to send a copy of Form 1098-T to the student it names is January 31. The deadline to file a paper copy with the IRS is February 28, and the deadline to file electronically is March 31.^[4]

What are Education Credits?

Education credits reduce the amount of tax owed by students (or parents who claim a student as a dependent). The reduction is determined by the amount of qualified tuition and related expenses paid by the student in a tax year.

There are two programs through which students can access education credits, known as the Lifetime Learning Credit and the American Opportunity Credit. Students must use their copies of Form 1098-T to apply for either credit.

Lifetime Learning Credit: This offers up to $2,000 per tax return. This credit is not refundable, so if the credit exceeds the amount owing, a refund will not be issued.
American Opportunity Credit: This offers $2,500 per tax return. Forty percent of this credit is refundable, meaning up to $1,000 can be refunded if the credit exceeds the amount of tax owed. Graduate students are not eligible for the American Opportunity Credit.

1098-T Form Parts (15)

Filer’s Information

Enter the name, street address, city or town, state or province, country, ZIP code, and telephone number of the filer, or educational institution filing the form. Make sure to use the phone number at which the filer can be reached, rather than the institution’s general phone number.

Filer’s EIN

Enter the Employer Identification Number (EIN) for the filer.

Student’s TIN

Enter the student’s Taxpayer Identification Number (TIN). This can be a social security number, individual taxpayer identification number, or adoption taxpayer identification number.

Student’s Information

Enter the student’s name, street address, city or town, state or province, country, and ZIP code.

Service Provider/Account Number

Enter either a phone number for the third-party service provider who filed the form or an account number used to distinguish the student. An account number is required if more than one Form 1098-T is being filed for a student.

Box 1: Tuition

Enter the total amount paid during the calendar year for tuition and expenses, less any reimbursements or refunds related to those payments. Include payments for past-due tuition and other qualified expenses paid during the tax year.

Box 2

This box is reserved for future use. Leave it blank.

Box 3

This box is also reserved for future use. Leave it blank.

Box 4: Adjustments

Enter the dollar amount of any adjustments made to tuition and expenses reported in a prior year on a prior Form 1098-T. Adjustments include reimbursements, refunds, and reductions in charges related to amounts billed. If a previous year’s expenses were lower than reported, there may be additional tax to pay.

Box 5: Scholarships or Grants

Enter the total amount of any scholarships or grants paid directly to the educational institution and processed in the tax year. This includes payments from such entities as the Department of Veterans Affairs, the Department of Defense, civic and religious organizations, and nonprofit organizations.

This may reduce the amount of education credit the student can claim for the year.^[5]

Box 6: Adjustments to Scholarships or Grants

Enter the amount of any adjustments or reductions made to the amount of scholarships or grants reported for any prior year.

Box 7

Check this box if any payments received relate to an academic term that begins in the first quarter of the year following the tax year.^[6]

Box 8: Half-time

Check the box if the student was at least a half-time student during the tax year. A half-time student is a student enrolled for at least half the full-time academic workload for the course of study the student is pursuing. An institution’s standards for half-time must equal or exceed the standards set by federal law.^[7]

Box 9: Graduate Student

Check the box if the form applies to a graduate student.

Box 10: Reimbursement/Refund

Enter the amount of any reimbursements or refunds paid to the student in a tax year. Some students receive reimbursements under a tuition insurance policy, which covers unforeseen circumstances such as a family emergency that might force a student to withdraw from school after paying tuition.

Instructions for Filers (6 Steps)

1. Obtain Student’s TIN

Request, in writing, the student’s Taxpayer Identification Number (TIN). To do this, use Form W-9S or institution-specific forms, such as admission or enrollment forms or financial aid applications.

2. Obtain Form

Order Form 1098-T directly from the IRS.

3. Complete Form

Use the IRS instructions and the instructions outlined above to complete Form 1098-T.

4. File Copy A with IRS

File Copy A with the IRS by the deadlines outlined above. File this together with Form 1096.

5. Send Copy B to the Student

Send Copy B to the student whose tuition and expenses are being reported. This is important, as the student (or the student’s parents, if the student is a dependent) will need the information it contains to complete annual income tax returns.

6. Retain Copy C for Records

Keep Copy C for your records. The IRS recommends retaining tax records for three years.^[8]

Frequently Asked Questions (FAQs)

What do I do if I receive Form 1098-T?

Use Form 1098-T to complete your annual income tax returns (Form 1040 or 1040-SR).

How do I claim education credit for tuition and expenses I paid?

File Form 8863 along with your annual income tax return. See the Tax Benefits for Education: Information Center for more information.

Who can claim education credit?

To be eligible for education credit, a student must be enrolled at an eligible educational institution and pay tuition and expenses. If a student’s parents claim the student as a dependent, then the student cannot claim education credit, but their parents can. Students whose filing status is “married filing separately” and students who were non-resident aliens for any part of the year cannot claim an education credit.^[9]

IRS Form 1098-T