Using Form 1098-T
1. Why is box 1 marked as "INTENTIONALLY BLANK"?
Box 1 is marked as INTENTIONALLY BLANK for all UC students. Schools are directed by IRS to choose a method of reporting, either by reporting the payments received for qualified tuition in box 1 or by reporting the amounts billed for qualified tuition in box 2. UC has chosen the latter method.
This does not mean your "payments received for qualified tuition and related expenses" are zero. To help you review all payments and other credits applied to your account during the year, UC has provided the supplementary table (available online only) below your Form 1098-T. This table summarizes all charges and credits to your account during the calendar year.
2. I attended UC during Spring Semester 2013, but some or all of those amounts are missing from my 2013 Form 1098-T. Why?
Form 1098-T reports only those transactions that posted to your student account during calendar year 2013. Spring Semester began in January. Most students registered for Spring Semester 2013 during the previous November or December. Most students also paid for Spring Semester 2013 in November or December 2012. Any charges that were billed to your account and any payments that we received before January 1, 2013, were reported on your 2012 Form 1098-T.
3. I am attending UC during Spring Semester 2014, but some or all of those amounts are missing from my 2013 Form 1098-T. Why?
Form 1098-T reports only those transactions that posted to your student account during calendar year 2013. Spring Semester begins in January. If you registered, dropped or added classes, or made payments for Spring Semester 2014 after December 31, 2013, those amounts will be reported on your 2014 Form 1098-T, which will be available in January 2015.
4. Why are my payments and other credits shown in the supplementary table as negative numbers?
This is merely to emphasize the accounting difference between your charges (which increase your bill) and your payments (which decrease your bill). For example, total Qualified charges of $8,000 means UC billed you for $8,000 in charges during 2013. Total Cash/Check/Credit Card payments of -$7,000 means UC received your $7,000 payment during the year.
If your Scholarships column total is a negative number, you will see that same amount reported as a positive number in box 5 (Scholarships or grants) of your Form 1098-T.
5. Does my Form 1098-T tell me everything I need to know for tax purposes?
Probably not. Your Form 1098-T reports all transactions that flowed through your student account during the calendar year. However, students typically incur other expenses that may also qualify for tax credits or deductions. The most common example is textbooks. Other examples of qualified and nonqualified expenses not reported on your Form 1098-T may include class fees for study-abroad classes, off-campus housing expenses, and other fees you paid directly to your academic department or college instead of to UC. You should rely on your own financial records and receipts to document those expenses. For further information on "qualified" education expenses, please review IRS Publication 970, Tax Benefits for Education. You may wish to consult with a tax professional.
6. I receive "stipends" from UC. Are they included on my Form 1098-T?
That depends on how UC classified your "stipends" for tax purposes. If your stipends represent wages you have earned, then you have probably been receiving them in the form of a regular paycheck and may have had taxes and/or other amounts withheld from them. In that case, your wages will be reported fully on Form W-2, Wage and Tax Statement. Those wages are not included anywhere on your Form 1098-T.
If your stipends represent a scholarship or fellowship awarded to you on the basis of academic merit and/or financial need, and not as wages you have earned, then you have probably received them as credits flowing through your UC student account. In that case, your scholarships and fellowships are reported in box 5 (Scholarships or grants) of your Form 1098-T, and they also appear in the Scholarships column of your supplementary table.
7. My Form 1098-T reports that I received some scholarships, but I don't recall receiving any. Is this correct?
Some UC academic programs, especially distance learning programs, will officially charge a student the regular tuition rate (shown as Qualified expenses) minus some discount amount (shown as Scholarships), and will only bill the student for the advertised net amount. In such a case, your Form 1098-T is correct. Any payments you made for your net tuition will be shown in the Cash / Check / Credit Card column of the supplementary table below your Form 1098-T.
For questions about your specific UC student account, please contact our One Stop Student Service Center by e-mail at email@example.com or by phone at (513) 556-1000.
8. Do I need to report my scholarships as taxable income?
Scholarships that pay for qualified tuition and related expenses are not taxable to the student. However, if any portion of your scholarships paid for Nonqualified expenses, then you may be responsible for reporting such portion as taxable income on your tax return. For further guidance, please review IRS Publication 970, Tax Benefits for Education.
Foreign students who are nonresident aliens for tax purposes should also review IRS Publication 519, US Tax Guide for Aliens.
9. Are Parent PLUS loans reported on my Form 1098-T?
All loan proceeds, including Parent PLUS loans, that pass directly through your UC student account are included in the supplementary table below your Form 1098-T. Loan proceeds are not reported separately on the Form 1098-T itself.
Form 1098-T is never issued in the name of the parent. Any Parent PLUS loan proceeds received by UC will be shown on the student's tax form.
10. How is tuition remission reported on my Form 1098-T?
Any tuition remission benefit you received will be shown in its own column in the supplementary table below your Form 1098-T. In addition, box 2 (Amounts billed for qualified tuition and related expenses) will report the difference between your total Qualified expenses and your total Tuition Remission benefit received during the year.
11. How are late fees reported on my Form 1098-T?
Fees charged for late registration and/or late payment are shown as Nonqualified expenses in the supplementary table, and are not reported anywhere on your Form 1098-T.
12. My family used money from a "section 529 account" to pay some of my expenses. Those instructions say that room and board are qualified expenses, but they are shown as Nonqualified expenses in my supplementary table. Is this correct?
Yes. The requirements of state-sponsored section 529 accounts allow for money to be withdrawn, without negative tax implications on the withdrawal, to pay for education expenses including room and board. So, those expenses are "qualified" for purposes of withdrawals from a section 529 account.
However, room and board expenses are still "nonqualified" for purposes of computing an American Opportunity Credit, Lifetime Learning Credit, or tuition and fees deduction on your tax return. So, we report all room and board expenses in the Nonqualified column of your supplementary table.
For further information on section 529 accounts and other education-related tax benefits, please review IRS Publication 970, Tax Benefits for Education.
13. I received VA benefits under the Post 9/11 GI Bill. How are those benefits reported on my Form 1098-T?
Benefits received under the Post 9/11 GI Bill are reported on your Form 1098-T as scholarships in box 5.
The Post 9/11 GI Bill specifies that for financial aid purposes, VA benefits should not be considered as a resource (either as income or a scholarship) to the recipient when need is calculated. However, students receiving VA benefits may not use that amount to calculate American Opportunity or Lifetime Learning Credits. Therefore, IRS has determined that these tuition benefits should be included in scholarships/grants reported in box 5 of Form 1098-T.
14. I received a notice from IRS, stating that I couldn't claim a credit/deduction without having a number in my Form 1098-T box 1. What should I do?
IRS is trying to verify whether you are entitled to the credit/deduction you claimed on that year's tax return. Read your notice carefully. IRS is probably just requesting that you send them copies of other documentation to support your claim. Copies of cancelled checks, credit card statements, bank statements and student bills are helpful. Copies of student bills including payments made are available to our students through our One Stop Center.
However, some IRS notices were poorly worded, and stated incorrectly that Form 1098-T must report a number in box 1 to permit a credit/deduction to be claimed.
The national organization NACUBO, which supports colleges and universities across the US, posted this announcement in November 2011, regarding these incorrect IRS notices. As recently as early 2012, students still reported receiving these incorrect IRS notices.
If these suggestions do not satisfy your need, you are welcome to send a copy of your IRS notice to our Director, Tax Compliance at firstname.lastname@example.org, or by fax at 513-556-2504. We will get in touch with you within 1-2 business days with appropriate guidance.
15. Spring Semester ended in April, so I was a student during only 4 calendar months. Does that mean my parents can't claim me as their dependent for that year?
Parents are entitled to claim dependents on their tax return for any year in which that person satisfies either the Qualifying Child or the Qualifying Relative tests. See IRS Publication 501, specifically the section on Exemptions for Dependents.
While our current academic calendar does affect the 5-month criterion to qualify as a full-time student under the Age test, parents are also advised to review the other tests as well. Specifically, parents should carefully review the Support test under Qualifying Child, and the Gross Income and Support tests under Qualifying Relative.
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