Understanding Form 1098-T: Student Eligibility Requirements for Tax Benefits

The Form 1098-T, officially titled "Tuition Statement," is an informational document issued to students by eligible educational institutions. This form plays a crucial role in determining a student's eligibility for various education-related tax credits and deductions. Colleges and universities use Form 1098-T to report information about tuition, fees, scholarships, and grants posted to a student’s account to the Internal Revenue Service (IRS) as required by the Taxpayer Relief Act of 1997. In addition, TCNJ is required to provide each eligible student with a copy of their Form 1098-T on an annual basis. This form is informational only and serves to alert students that they may be eligible for federal income tax education credits.

Who is Eligible?

Either the student, or the person who claims the student as a dependent, may be eligible for tax credits and/or deductions on their individual income tax return for qualified tuition and related expenses. If you're a student and a taxpayer, you may be eligible to claim deductions and tax credits for qualified tuition and related education expenses. You'll receive a 1098-T form if you have any expenses that qualify for a credit or deduction.

Important Considerations

It's important to note that the 1098-T may not provide all the information needed to determine eligibility, and you will also need your personal financial records. Eligibility for any tax benefit depends upon your individual facts and circumstances. The University cannot provide tax advice.

Factors Affecting Eligibility

Depending on several factors, you may be eligible for a federal education tax credit, including:

Your income (or your family’s income, if you are a dependent).
Whether you were considered enrolled full or half-time.
The amount of your qualified educational expenses for the year.

Detailed information about claiming education tax credits can be found in IRS Publication 970, page 9.

Using Form 1098-T to Complete Form 8863

The dollar amounts reported on your Form 1098-T may assist you in completing IRS Form 8863. The Form 8863 is used for calculating the education tax credits that a taxpayer may claim as part of their tax return.

Understanding the Boxes on Form 1098-T

The Form 1098-T contains several boxes that report different types of financial information. Here's a breakdown of what each box represents:

Box 1: Amounts Paid for Qualified Tuition and Related Expenses (QTRE): Box 1 will report payments made toward qualified tuition and related expenses that were billed in a calendar year. Box 1 reports combined payments from all sources, but it will not exceed the QTRE billed during the tax year. The amount reported is the total amount of payments received for qualified tuition and related expenses from all sources during the calendar year. The amount reported is the total amount of payments received less any reimbursements or refunds made during the calendar year that relate to the payments received for qualified tuition and related expenses during the same calendar year. The amount reported is not reduced by scholarships and grants reported in box 5.
- What Qualifies as QTRE: The IRS does not consider fees for health services or transportation qualified tuition. So, payments made toward these charges will not be reflected on the 1098-T. All other tuition and related expenses paid are reported in Box 1.
- If the school reports the amount paid, it puts that figure in Box 1 of the form. A school generally has to use the same reporting method every year. If it changes its method-which requires IRS approval-it puts a check mark in Box 3.
Box 3: Change in Reporting Method: Box 3 is checked because Texas State University changed its reporting method beginning with tax year 2018.
Box 4: Adjustments Made for a Prior Year: Box 4 represents any adjustments made for a prior year to Form 1098-T. This may reduce any allowable education credit that you claimed for the prior year.

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Box 5: Scholarships and Grants: Box 5 represents the total of all scholarships or grants administered and processed by the eligible educational institution. Enter the total amount of any scholarships or grants that you administered and processed during the calendar year for the payment of the student’s costs of attendance. Scholarships and grants generally include all payments received from third parties (excluding family members and loan proceeds). This includes payments received from governmental and private entities such as the Department of Veterans Affairs, the Department of Defense, civic and religious organizations, and nonprofit entities. A scholarship or grant is administered and processed by you if you receive payment of an amount, whether by check, cash, electronic transfer, or other means, and such payment is designated as a grant or a scholarship by the payor, or the circumstances make it clear that the payment is a grant or scholarship. The amount of scholarships or grants for the calendar year reduce the amount of any allowable tuition and fees deduction or the education credit you may claim for the year.
Box 6: Adjustments to Scholarships or Grants for a Prior Year: Box 6 represents adjustments to scholarships or grants for a prior year. This may affect the amount of any allowable tuition and fees deduction or education credit claimed for the prior year.
Box 7: Amounts for an Academic Period Beginning in the Next Calendar Year: Box 7 indicates, if checked, that Box 1 includes amounts for an academic period beginning in the next calendar year.
Box 8: Half-Time Student: Check this box if the student was at least a half-time student during any academic period that began in 2025. 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. Your institution’s standard for a half-time student work load must equal or exceed the standards established by the Department of Education under the Higher Education Act and set forth in 34 C.F.R.
Box 9: Graduate Student: Check this box if the student was a graduate student.

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Box 10: Box 10 of the form comes into play only in cases in which students have had expenses reimbursed under a "tuition insurance" policy.

Accessing Your 1098-T Form Electronically

As part of ongoing sustainability and cost reduction measures, Texas State University provides students a 1098-T tax form and financial addendum electronically. Students can choose to receive their 1098-T form electronically by consenting online through the ctcLink Student Dashboard. Under Financials, select View 1098-T and then Grant Consent. You must mark the checkbox to provide consent, then click Submit. Enroll in electronic delivery of your 1098-T form in order to receive your 1098-T Tuition Statement form more quickly. At the top right of the page click Register to create a profile. If you already have a profile, click Sign In. Once logged into your account. Navigate to Your Communication Center at the top. Select Tax Statement eConsent. At the bottom of the page click Add New Consent. Once clicked the Electronic Consent Application will open below. Complete the Electronic Consent Application. Enter your Heartland Key - if the key is not an exact match, you may be prompted to enter additional points of verification.

Seeking Further Assistance

For additional assistance, please consult with your tax advisor or contact the IRS.

IRS Initiatives and Regulations

The Taxpayer First Act of 2019 authorized the Department of the Treasury and the IRS to issue regulations that reduce the 250-return e-file threshold. T.D. 9972, published February 23, 2023, lowered the e-file threshold to 10 (calculated by aggregating all information returns), effective for information returns required to be filed on or after January 1, 2024. The IRS has developed IRIS, an online portal that allows taxpayers to e-file information returns after December 31, 2022, for 2022 and later tax years.

Instructions for Filing Form 1098-T

In addition to these specific instructions, you should also use the current General Instructions for Certain Information Returns.

Obtaining Student Information

You may use Form W-9S, Request for Student’s or Borrower’s Taxpayer Identification Number and Certification, to obtain the student’s or borrower’s name, address, TIN, and student loan certification to be used when filing Form 1098-E or 1098-T. Use of Form W-9S is optional; you may collect the information using your own forms, such as admission or enrollment forms, or financial aid applications. An educational institution, insurer, or lender may establish a system for students and borrowers to submit Form W-9S electronically, including by fax. Also, if an electronic Form W-9S is used to obtain the borrower’s certification that all the loan proceeds are used solely to pay qualified higher education expenses, your electronic system must require, as the final entry in the submission, an electronic signature by the borrower whose name is on Form W-9S. The signature authenticates and verifies the submission.

Electronic Filing and Furnishing Statements

To ease statement furnishing requirements, Copy B of Forms 1098-E and 1098-T are fillable online in a PDF format, available at IRS.gov/Form1098E or IRS.gov/Form1098T.

If you are required to file Form 1098-T, you must furnish a statement or acceptable substitute, on paper or electronically, to the student. The global consent process must meet all the consent, disclosure, format, notice, and access period requirements for electronic furnishing of Forms 1098-T as required by paragraphs (a)(2) through (6) of Regulations section 1.6050S-2.

Truncating Student Taxpayer Identification Number (TIN)

Pursuant to Regulations section 301.6109-4, all filers of Form 1098-T may truncate a student’s TIN (social security number (SSN), individual taxpayer identification number (ITIN), adoption taxpayer identification number (ATIN), or employer identification number (EIN)) on payee statements. Truncation is not allowed on any documents the filer files with the IRS. A filer’s TIN may not be truncated on any form. Enter the student’s TIN, as provided to you on Form W-9S, Request for Student’s or Borrower’s Taxpayer Identification Number and Certification, or other form. If you solicited the student’s TIN in writing (Form W-9S or other form) for the current year, check the box. Also check the box if you obtained the student’s TIN in a prior year by making a solicitation in writing (Form W-9S or other form) or you obtained the student’s TIN in a prior year from his or her financial aid application or other form and in either case have no reason to believe the TIN previously obtained is incorrect. Check the box if the institution is filing the Form 1098-T with nothing in the field for the student’s TIN because the institution has no record of a TIN, but only if you made a written solicitation for the TIN on or before December 31 of the year for which you are filing the Form 1098-T. By checking the box and filing Form 1098-T with the IRS (for electronic filers), you certify under penalties of perjury that you have in good faith complied with the standards in Regulations section 1.6050S-1 governing the time and manner of soliciting the TIN of the student. Filers who transmit paper forms to the IRS will make such certification by signing Form 1096 in conjunction with filing the returns with the boxes checked in the fields designated for the student’s TIN.

Other Information to Include

In the student’s address box of Form 1098-T, enter the student’s permanent address. You must provide your name, address, and telephone number. In addition, you may include information on a third-party service provider who filed the form or who may answer questions about the statement. You must provide the telephone number for the information contact at the institution. Generally, this is an administrative office or department. Do not provide the institution’s general telephone number. The account number is required if you have multiple accounts for a recipient for whom you are filing more than one Form 1098-T. Additionally, the IRS encourages you to designate an account number for all Forms 1098-T that you file.

Eligible Educational Institution

An eligible educational institution is a college, university, vocational school, or other postsecondary educational institution that is described in section 481 of the Higher Education Act of 1965 as in effect on August 5, 1997, and that is eligible to participate in the Department of Education’s student aid programs.

You must file Form 1098-T for each student who is enrolled in your institution for any academic period (for example, semester, trimester, or quarter) in 2025, but see Exceptions, earlier. A date during the period when enrollment data must be collected for purposes of the Integrated Post Secondary Education Data System administered by the Department of Education. For more information about reporting on Form 1098-T, see Regulations section 1.6050S-1. Also see Notice 2006-72, 2006-36 I.R.B.

Academic Credit

Academic credit is credit awarded by an eligible educational institution for the completion of course work leading to a postsecondary degree, certificate, or other recognized postsecondary educational credential.

For example, Sarah, a medical doctor, takes a course at University X’s medical school. Sarah takes the course to fulfill Montana’s licensing requirement that medical doctors attend continuing medical education courses each year. Sarah is not enrolled in a degree program at University X and takes the medical course through University X’s continuing professional education program. University X does not award Sarah credit toward a postsecondary degree on an academic transcript for the completion of the course but gives Sarah a certificate of attendance upon completion.

Exceptions to Filing

Students for whom you do not maintain a separate financial account and whose qualified tuition and related expenses are covered by a formal billing arrangement between an institution and the student’s employer or a governmental entity, such as the Department of Veterans Affairs or the Department of Defense. You must file Form 1098-T if you are an eligible educational institution. An eligible educational institution that is a governmental unit, or an agency or instrumentality of a governmental unit, is subject to the reporting requirements of Form 1098-T. If another person receives or collects payments of qualified tuition and related expenses on your behalf, the other person must file Form 1098-T. However, if the other person does not possess the information necessary to comply with the reporting requirements of Form 1098-T, then you must satisfy the reporting requirements of Form 1098-T. Also, if you are an insurer engaged in a trade or business of making refunds or reimbursements of qualified tuition and related expenses, you are required to file Form 1098-T.

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