Education Tax Credits: 1098-T

The U.S. tax code provides a variety of tax incentives for families who are paying higher education costs or repaying student loans. Form 1098-T is the information return that colleges are required to issue for the purpose of determining a student’s eligibility for the American Opportunity Tax Credit (AOTC) and Lifetime Learning Credit (LLC) education tax credits. More information about these tax credits can be found online: https://www.irs.gov/individuals/education-credits-aotc-llc

Saint Michael’s College will issue and mail the 2019 IRS 1098-T statement by January 31, 2020. The form may also be viewed and printed by students from the SMC Student Portal.

The dollar amounts reported on your Form 1098-T may assist you in completing IRS Form 8863 – the form used for calculating the education tax credits that a taxpayer may claim as part of your tax return. Many taxpayers will require additional information from their personal records in addition to Form 1098-T. Review instructions and more information about IRS Form 8863 and Education Tax Credits.

Your 1098-T will reflect only amounts that were paid to your SAINT MICHAEL’S COLLEGE student account in the tax year to cover QTRE or Qualified Tuition Related Expenses that were billed. Other charges, such as required textbook costs, may be qualified expenses but are not reported on the 1098-T because they were not billed to your student account. Payments made for amounts that were billed in a prior year will not be included in Box 1 of the 1098-T.

Many students and families need their 1098-T information from the current and prior calendar year and records of other qualified expenses as well as their personal payments in order to determine their education tax benefit eligibility.

Student Financial Services staff are not tax professionals and given the complexity of the tax code, we cannot provide tax advice or determine your eligibility for education tax benefits.

Resources

The resources provided here are designed to assist you in understanding the tax benefits that may be available to you as you prepare the previous fiscal year’s tax return.

Frequently Asked Questions

Payment reported on IRS Form 1098-T include nearly all payments made on a student’s account, including personal payments, payment plan credits, and payments from financial aid including grants, loans and scholarships, up to the amount of Qualified Tuition Related Expenses (QTRE) billed to the students’ account in 2019.  To determine your eligibility for tax benefits you may need your 2018 IRS Form 1098-T and your record of payments paid in 2018.

Saint Michael’s College posts a credit to the student’s account for the full amount of the semester’s Cashnet plan when you establish your plan. For 1098-T reporting purposes, the Cashnet credit will be included as a payment as of the date that the credit is posted to the student account.

Yes, as of 2018, colleges are now required to report payments received for Qualified Tuition Related Expenses (QTRE) during the year in Box 1 and no longer report QTRE amounts billed in Box 2.

No, IRS Form 1098-T is an information return indicating Qualified Tuition Related Expenses paid in calendar year 2019.  You may be eligible for certain tax benefits even if you were not issued IRS Form 1098-T.  You may also receive IRS Form 1098-T and not qualify for education tax benefits.

Our staff are not tax preparers and cannot provide tax advice. If you have questions about education tax benefits, please contact a tax professional or refer to IRS Publication 970.