Tax Benefits for Education
Frequently Asked Questions
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.
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 and the American Opportunity 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.
FORM 1098-T FREQUENTLY ASKED QUESTIONS:
1. What is a 1098-T? 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 be provided to each applicable student.
2. Why did I receive a Form 1098-T? In January of each year, Bowling Green State University provides secure electronic access at https://www.MyBGSU.edu to the IRS Form 1098-T for all students who had qualified tuition and other related educational expenses billed to them during the previous calendar year. If the form is not electronically accessed (which the student has to select to get the form electronically), it is mailed at the end of January.
3. Did you send a copy of this form to the IRS? 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 (American Opportunity and Lifetime Learning education tax credits), as well as other tax benefits for higher education expenses.
4. Why isn't there an amount in Box 1? 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. Bowling Green State University 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.
5. For purposes of Box 2, what educational expenses are considered as qualified tuition and related expenses? Qualified tuition and related expenses refer to tuition and required fees, such as general fees, out of state surcharge, course/class 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 housing or food - even if they are required for enrollment in the course or program.
6. 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? Not necessarily. The University 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.
7. What amounts appear in Box 4 - Adjustments made for a prior year? This box shows the amount of any tuition and fee reductions in the current calendar year for charges that were billed in a previous calendar year.
8. What amounts appear in Box 6 - Adjustments to scholarships or grants for a prior year? This box shows the amount of any scholarship or grant reductions in the current calendar year for aid that was credited in a previous calendar year.
9. Why is there no check mark in box 8 - at least part-time? Bowling Green State University checks this box if you were half-time or more for at least one term beginning during the year. This information is important in determining eligibility for the American Opportunity Tax Credit.
10. What is the purpose of Box 9 – graduate student? Box 9 will be checked if you were enrolled as a graduate student for at least one academic period during the calendar year. If Box 9 is checked, it alerts the IRS to the fact that the American Opportunity Tax Credit is not allowable for the student’s qualified expenses because the student is beyond the first four years of post-secondary education and that the Lifetime Learning Credit may be allowable.
11. I am a foreign student; can I claim a credit? Generally, foreign students cannot claim a credit. However, some foreign students may be eligible. Review IRS forms, instructions, and publications for guidance.
12. My address listed on the 1098-T has changed. Will this affect me when I file my tax return? No. The address shown on Form 1098-T is irrelevant for IRS income tax filing purposes. However, you should update your address in the Student Center in MyBGSU at http://bgsu.edu so that the University has up-to-date information.