Detailed Explantion of the 1098-T
- The Form 1098-T is an information form filed with the IRS.
- The Form 1098-T that you receive reports amounts paid for qualified tuition and related expenses, as well as other related information.
- You, or the person who may claim you as a dependent, may be able to take the tuition and fees deduction or claim an education credit on form 1040 or 1040A for the qualified tuition and related financial transactions that were timestamped during the calendar year.
- There is no need to attach Form 1098-T to your tax return.
- There is no IRS requirement that you must claim the tuition and fees deduction or an education credit. Claiming education tax benefits is a voluntary decision for those who may qualify.
Form 1098-T, Tuition Statement, contains 10 numbered boxes. This is an explanation of those boxes.
- Box 1 “Payments received for qualified tuition and related expenses” This box contains the payments for qualified tuition and related expenses or QTREs received by UC in the calendar year net of any refunds or reimbursements of those amounts. Related expenses include tuition, books, and mandatory fees that appear on the term bill. Students may have qualified expenses that do not appear on the term bill and should use their personal records to account for such expenses. Room & board and Student Health Insurance do not qualify. These payments can be out of pocket payments, scholarships, student loans, or other funds used to pay the student’s qualified charges.
- Box 2 will be marked as “not reported.”
Prior to tax year 2018, the IRS gave institutions the option to report either payments in Box 1 OR amounts billed in Box 2. UC chose to report amounts billed in Box 2 so 2017 and prior 1098-T forms will reflect Box 1 as “not reported.” To calculate payments made to UC, prior to tax year 2018, see the term bills for the semesters within the appropriate tax year. Students can access their term bill once signed into Catalyst. Click the “My Finances” tile followed by “View Term Bills” in the “Account Summary.”
- Box 3 will be blank as the IRS no longer uses it.
- Box 4 “Adjustments made for a prior year” shows adjustments to QTREs reported on a prior year’s Form 1098-T. This may arise if a payment is made in the prior year and refunded or reimbursed in the current year. For example, if you paid Spring semester classes in December and withdrew from classes in January which resulted in a refund, Box 4 reports the decrease in paid tuition due to the withdrawal. The amount reported in Box 4 for adjustments to qualified tuition and related expenses may reduce any allowable education credit you may claim for the prior year.
- Box 5 “Scholarships and Grants” shows the scholarships or grants administered by the University against the student’s account in the calendar year. These amounts may reduce the amount of education credit you receive. If you receive a Pell grant, you may be able to increase your education credit if you treat any portion of the Pell grant as income on your tax return.
- Box 6 “Adjustments to scholarships or grants for a prior year” is similar to Box 4, in that it shows adjustments to scholarships or grants that were reported on a prior year Form 1098-T but adjusted on subsequent year. This may arise if a scholarship was credited twice in the prior year and reversed in the current year.
- Box 7 “Check this box if the amount in box 1 includes the amount for an academic period beginning January-March 2021” shows whether the amount in Box 1 includes amounts beginning in the first three months of the next calendar year. If you pay an amount in December for the following Spring Semester Box 7 will be checked. This amount is eligible for the credit in the current year and should not be counted twice.
- Box 8 “Check this if at least a half-time student” shows whether you are carrying at least one-half of a normal full-time academic workload during your course of study for the year. For undergraduate and Law students UC considers 6 credit hours as one-half of an academic workload for each semester attended. For most graduate students UC considers 5 credit hours as one-half of an academic workload for each semester attended.
- Box 9 “Check this if a graduate student” shows whether you are enrolled in a graduate program or one for a graduate level certification or graduate level credential(s). The student is a graduate student if the student was enrolled in a program or programs leading to a graduate-level degree, graduate-level certificate, or other recognized graduate-level educational credential.
- Box 10 “Ins. Contract reimb/refund” shows the total amount of reimbursements or refunds of QTREs made by an insurer. This is extremely rare at UC but may reduce the amount of any education credit you can claim for the year.
UC recommends that you consult with your tax advisor/professional to determine if you are eligible to receive tax credits.
You are not required to attach IRS Form 1098-T to your tax return. The IRS Form 1098-T is not like the IRS Form W-2 obtained from your employer, which is required to be attached to the tax return filed with the IRS. The primary purpose of the IRS Form 1098-T is to let you know that UC has provided required information to the IRS to assist them in determining who may be eligible to claim the tuition and fee deduction or an education credit.
You should not rely solely on the supplemental information provided by UC. If you are taking the tuition and fee deduction or claiming one of the education credits, you should also use your own records to determine tuition paid, refunds of qualified expenses, and tax-free educational assistance.
Please be aware that the 1098-T captures financial information on a calendar year basis (January 1 – December 31) and you will likely need your term bills (also available in Catalyst) and other personal receipts (eg. books & supplies) to calculate your tax credits and deductions.
Box 1 may not reflect the entire payment as noted on your bank statement. Payments (or payment portions) that apply toward housing, dining, health insurance, or other non-qualified expenses will not be reflected in Box 1.
The Social Security Number and address on Form 1098-T were obtained from information provided to UC, although the address shown on Form 1098-T is irrelevant for IRS income tax filing purposes. The single most important information on the form is your Social Security Number. Your Social Security Number must be correct.
Failure to supply UC with your SSN can be costly to you. Without your SSN in your student record, UC will be unable to include your SSN on your year-end Form 1098-T, which we will issue in January. Failure to provide us with your SSN by December 20 may result in IRS disallowing or delaying any education tax credit (American Opportunity or Lifetime Learning credit) claimed on your tax return or on your family's tax return.
Please take the time to add or update your SSN by followng the instuctions below:
- Log in to Catalyst, and click on the My Profile tile.
- Make sure Personal Details is selected on the left–hand side of the screen.
- Select the Biographic tab on the right–hand side of the screen.
- Open the section titled Social Security Number.
- Click the right arrow next to the Social Security Number to open the dialog box.
- Add or update your Social Security Number in the first box. (The entry must be nine numbers, with or without a hyphen.)
- Re–enter your Social Security Number in the second box.
- Click the green Save button at the top right.