Learn About Getting Your 1098-T Form

What Is the 1098-T Form and Why It Matters

The 1098-T form is an official tax document that reports qualified education expenses paid by students during the tax year. Schools and educational institutions send this form to both the student and the IRS to document tuition, fees, and other related costs. The form gets its name from the IRS tax code section that governs education tax credits—section 1098, subsection T.

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This form exists because the federal government offers tax credits designed to help offset the cost of higher education. Unlike tax deductions, which reduce your taxable income, tax credits directly reduce the amount of tax you owe. A $1,000 tax credit is worth $1,000 in tax reduction, making these credits particularly valuable for families managing education costs.

The 1098-T form reports the amounts that may be used to claim two main education tax credits: the American Opportunity Tax Credit and the Lifetime Learning Credit. According to IRS data, millions of taxpayers claim these credits each year, making the 1098-T form an important document in the tax filing process for students and their families.

Schools are required to send the 1098-T form to students by January 31 each year for the previous tax year. The form shows qualified education expenses paid during that year, but it's important to understand that the form itself does not automatically determine whether you can use these credits. Your specific situation—including income level, student status, and type of expenses paid—all factor into the calculation.

Practical Takeaway: Expect to receive your 1098-T form from your school by the end of January. Keep this document with your tax records, as you'll reference it when preparing your tax return or exploring whether education tax credits may apply to your situation.

Understanding Which Expenses Appear on the 1098-T

The 1098-T form reports qualified education expenses, but not every school cost counts. Understanding which expenses appear on the form—and which ones don't—helps you know what information you're looking at when you receive it.

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Qualified expenses that typically appear on the 1098-T include tuition and mandatory fees required for enrollment or attendance. These are the core education costs. The form also includes expenses for course materials like books, supplies, and equipment that the school requires as part of the program. Room and board may be included if the student lives in university housing and the school considers this part of the cost of attendance in their financial aid calculations.

Expenses that do NOT appear on the 1098-T form include student loan interest payments, transportation costs to and from school, personal expenses like groceries or clothing, health insurance premiums, and student activity fees that aren't required for enrollment. Additionally, costs paid with scholarships or grants typically do not show up on the form, since these funds were not out-of-pocket expenses paid by the student or family.

Box 1 on the form reports "Qualified Education Expenses" for the tax year. Box 2 shows "Scholarships or grants" that were applied to education costs. The form may also report expenses paid in prior or following years if they were paid during the current tax year. For example, if a student paid spring semester tuition in December of the current year, even though the classes occur in the following year, that amount typically appears on the current year's form.

Students attending less than half-time may see different reporting. Schools report on the 1098-T based on the status of the student during the tax year, and less-than-half-time enrollment affects which education credits may be usable.

Practical Takeaway: Review your 1098-T carefully when you receive it. Compare the qualified expenses shown to your own records of what you paid. If you paid for textbooks, supplies, or equipment separately, verify that these amounts are included. If amounts appear incorrect, contact your school's financial aid office to request a corrected form.

How Schools Report and Send the 1098-T Form

Educational institutions—colleges, universities, trade schools, and other postsecondary schools—are required by the IRS to report qualified education expenses on the 1098-T form. Schools must send these forms to students and file them with the IRS as part of their tax reporting obligations. The process is standardized, though schools may differ slightly in their exact procedures and timing.

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Schools typically gather expense information from their financial aid office, student accounts office, and registrar's office. The financial aid office tracks scholarships and grants. The student accounts office records tuition and fee payments. The registrar confirms student enrollment status, which determines reporting requirements. These offices work together to compile accurate information for each student.

By January 31 of each year, schools must provide the 1098-T form to the student. Many schools now deliver this electronically through a student portal, while others mail paper copies. Some schools offer both options. Students should check their school's website or contact the financial aid office if they're unsure how to obtain their form. If you paid education expenses at multiple schools during the same tax year, you may receive multiple 1098-T forms—one from each institution.

The form includes several boxes with specific information. Box 1a shows qualified education expenses before adjustments for scholarships. Box 1b shows the same expenses after scholarships are subtracted. Box 2 reports scholarships and grants. Box 5 indicates whether the student was at least a half-time student, which matters for certain tax credits. Some boxes may be blank if they don't apply to your situation.

Schools also file copies with the IRS and with state tax authorities. The IRS matches information reported on the 1098-T with information on your tax return. If there are discrepancies, it may trigger IRS correspondence. This is another reason to keep your 1098-T and compare it to your own records.

Practical Takeaway: Know when and how your school distributes 1098-T forms. Mark January 31 on your calendar as the deadline by which schools must provide them. If you don't receive your form by mid-February, contact your school's financial aid office. When you do receive it, review it right away rather than waiting until tax time to catch any errors.

What the 1098-T Means for Your Taxes

The 1098-T form provides information you may use when preparing your tax return, but the form itself is not an instruction for which credits to claim. The amounts reported on the 1098-T are a starting point for determining whether education tax credits may apply to your situation.

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To use information from the 1098-T for tax credits, several conditions must be met. The student must have been pursuing a degree or other recognized educational credential at an accredited institution. The expenses must have been paid by you, your spouse if filing jointly, or a dependent. You must not have used the same expenses to claim any other education benefit, such as a 529 plan distribution or education savings account withdrawal for the same expenses. Your income must fall below certain thresholds—these limits change annually but are in the range of $80,000 to $180,000 depending on filing status and credit type.

The American Opportunity Tax Credit allows up to $2,500 per student per year for the first four years of undergraduate study. It covers qualified tuition, fees, and course materials. This credit is partially refundable, meaning you may receive a refund even if you owe no tax. The Lifetime Learning Credit provides up to $2,000 per tax return per year for any student at any level of postsecondary education. It covers qualified tuition and fees, but not books and supplies.

You cannot claim both credits for the same student in the same year. Understanding the difference between these credits and which might provide more value in your situation requires reviewing your specific circumstances. Students and families often benefit from learning about both options and considering which applies to their case.

Some students and families may find that education tax credits do not apply to their situation because their income exceeds the limits, because they received scholarships that covered all education expenses, or because other factors affect credit calculations. Others may find that education costs not shown on the 1098-T—such as books purchased elsewhere—may still count toward tax credit calculations if you have receipts and records showing those purchases.

Practical Takeaway: Gather your 1098-T along with records of any education expenses you paid that don't appear on the form. Calculate your modified adjusted gross income for