Tax Benefits for Education - 1098-T
As required by the Internal Revenue Service (IRS), Form 1098-T is mailed by Jan. 31 to all students who had qualified tuition and other related educational expenses billed to them during the previous calendar year, January 1 – December 31.
The 1098-T form is informational only and should not be considered as tax advice. It serves to alert students that they may be eligible for federal income tax education credits such as the Lifetime Learning Credit and the Hope Credit as part of their Federal Income Tax Return. IRS Publication 970, "Tax Benefits for Higher Education," as well as Chapter 35 of IRS Publication 17, provide additional information on these credits. While it is a good starting point, the 1098-T, as designed and regulated by the IRS, does not contain all of the information needed to claim a tax credit. To determine the amount of qualified tuition and fees paid, and the amount of scholarships and grants received, a taxpayer should use their own financial records. 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.
FREQUENTLY ASKED QUESTIONS:
Q: What is a 1098-T?
A: The 1098-T form is used by eligible educational institutions to report information about their students to the IRS as required by the Taxpayer Relief Act of 1997. Eligible educational institutions are required to submit the student's name, address, taxpayer's identification number (TIN), enrollment status, amounts pertaining to qualified tuition and related expenses, and scholarships and/or grants, taxable or not. A 1098-T form must also be provided to each applicable student.
Q. Can I view my 1098T information online?
A. Yes. Log on to my.macc.edu using your myMACC username and password. Click on the “Student” tab at the top, then the “Billing Information” link in the left margin. At the bottom of the page is a link “Go to My 1098-T Info”. Click to view your 1098T info. Multiple years are available for viewing using the drop down box.
If you cannot remember your username and/or password, you will need to visit with Student Services personnel at your campus or Support Staff in the Library at the Main Campus in person. Requests for usernames and/or passwords over the phone or electronically are not accepted.
Q: Why did I receive a Form 1098-T?
A: As required by the Internal Revenue Service (IRS), Form 1098-T is mailed by Jan. 31 to all students who had qualified tuition and other related educational expenses billed to them during the previous calendar year, January 1 – December 31.
Q: What if I did not receive a 1098-T or I have lost mine, how do I get a copy?
A: You may access the information online as described above; or you may contact MACC at 1-800-622-2070, extension 11280 to request a copy.
Q: What do I do with it?
A: Keep it with your tax documents and consult your tax preparer or the IRS website at www.irs.gov to determine if you are eligible to take advantage of the federal income tax education credit.
Q: What are tax credits?
A: The American Opportunity Tax credit and the Lifetime Learning Tax Credit. For details about each credit visit the IRS website at www.irs.gov.
Q: How do I know if I am eligible?
A: MACC cannot determine if you qualify for a tax credit and is not allowed to give you tax advice. Please read the instructions of the 1098-T statement and obtain IRS publication 970 and Form 8863 or contact a tax professional about your personal income tax situation. The IRS website is www.irs.gov, and they can be reached at 1-800-829-1040.
Q: Did you send a copy of this form to the IRS?
A: Yes. Section 6050S of the Internal Revenue Code, as enacted by the Taxpayer Relief Act of 1997, requires institutions to file information returns to assist taxpayers and the IRS in determining the amount of qualified tuition and related expenses (qualified expenses) for which an education tax credit is allowable under section 25A (Hope and Lifetime Learning education tax credits), as well as other tax benefits for higher education expenses.
Q: Why isn't there an amount in Box 1?
A: The IRS instructs institutions to report either payments received (Box 1) or amounts billed for qualified tuition and related expenses (Box 2) on the 1098-T. Once an institution has selected one of these options, they cannot change reporting methods between calendar years without IRS permission. MACC reports qualified tuition and related expenses that were billed during the tax year (Box 2); therefore, Box 1 - Payments Received for Qualified Tuition and Related Expenses will be blank.
Q: For purposes of Box 2, what educational expenses are considered as qualified tuition and related expenses?
A: Qualified tuition and related expenses refer to tuition and required fees, such as the Student Activity/Support Service and Technology fees and lab fees, a student must pay to be enrolled at or attend an eligible education institution. Tuition waivers and remissions are considered reductions to qualified tuition and expenses. Qualified expenses do not include: 1. Amounts paid for any course or education involving sports, games, or hobbies unless the course or other education is required as part of the student's degree program or is taken to acquire or improve job skills.
Q: What about costs for books, supplies, room, board, transportation, personal, living, and other expenses.
A: These expenses are generally not qualified expenses because the costs are not required to be paid to the institution as a condition of the student's enrollment or attendance at the institution.
Q: Do the "Amounts Billed" figures in Box 2 of my 1098T equal the "Qualified Expenses" I can claim on my IRS Form 8863 as I file my taxes?
A: Not necessarily. MACC is required to provide the "amounts billed" and "scholarship or grant" figures to help you determine the amount of qualified expenses you can claim on your IRS Form 8863. Per Internal Revenue Code Section 25A, taxpayers may claim an education tax credit only with respect to qualified tuition and related expenses paid (not billed) during the calendar year. You will need to review your payment records to determine the actual qualified expenses paid. Remember that qualified amounts paid by student loans may count as payments eligible for these purposes. Scholarships and grants received may reduce your eligible payment amounts. See IRS Publication 970 for information to determine your qualified expenses paid amount.
Q: I did not keep information on my payments and student loan disbursements. Where can I get copies?
A: This information may be found on your myMACC student Billing Information portal. If you are a parent looking for this information for a student, please ask your student to access this information for you.
Q: What do the amounts appearing in Box 4 – Adjustments made for a prior year, mean?
A: This box shows the amount of any tuition and fees reductions in the current calendar year for charges that were billed in a previous calendar year.
Q: How did MACC figure out what amounts to include in Form 1098T Box 5 - Scholarships or Grants?
A: The figure in Box 5 - Scholarships or Grants, includes scholarships, grants and, if applicable, payments made by a third party under a formal billing arrangement (i.e., outside scholarships, employer provided educational assistance [regardless of taxability], military, etc.) which have been administered by MACC. If you received other forms of outside scholarships and grants not administered by MACC, it is your responsibility to adjust the figure accordingly. Third party payments do not include payments made by your parent or other individuals.
Q: What if I am an international student?
A: MACC will produce 1098-T forms for international students as requested. Presentation of a valid social security card or tax identification card is required for this purpose. Please contact the IRS for more information.