What is the 1098-T Form? Guide to College Tuition Tax Form

What is the 1098-T Form? If you’re a college student or parent navigating tax season, you’ve likely encountered the 1098-T form. This essential document, also known as the Tuition Statement, plays a key role in claiming education-related tax benefits. In this guide, we’ll break down what the 1098-T form is, who receives it, how to interpret its details, and how it can help reduce your tax bill through credits like the American Opportunity Credit (AOTC) and Lifetime Learning Credit (LLC). We’ll focus on the latest information for the 2025 tax year to ensure you’re up to date.

What is Form 1098-T?

Form 1098-T is an informational tax form issued by eligible educational institutions to report qualified tuition and related expenses (QTRE) paid during the calendar year. It’s not a bill or a direct tax deduction but rather a tool to help taxpayers determine eligibility for education tax credits or deductions. Eligible institutions include most accredited public, nonprofit, and private postsecondary schools, as defined by the IRS.

QTRE typically covers:

  • Tuition fees
  • Required enrollment fees
  • Course materials necessary for attendance

The form reports payments based on the calendar year (January to December), not the academic year, which can sometimes lead to confusion if payments span multiple years.

Who Receives Form 1098-T and Who Files It?

Eligible educational institutions must file Form 1098-T for each enrolled student for whom a reportable transaction occurs, such as payments for QTRE. This includes colleges, universities, and vocational schools that qualify under IRS guidelines. Governmental units or their agencies are also subject to these reporting requirements.

Students (or their parents if claimed as dependents) receive the form if they paid QTRE in the previous tax year. However, institutions aren’t required to issue it in all cases, such as for non-credit courses or if the student is a nonresident alien (unless requested). Insurers may also file the form for reimbursements or refunds of QTRE.

To be eligible, you need a valid Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) on file with the school. If not, you may need to update your information to receive the form.

Key Boxes on the 1098-T Form: What Do They Mean?

The 1098-T form includes several boxes with critical data. Here’s a breakdown for the 2025 tax year:

  • Box 1: Payments Received for Qualified Tuition and Related Expenses – This shows the total payments from any source (like personal funds, loans, or third parties) for QTRE during the calendar year. It cannot exceed the actual QTRE billed.
  • Box 4: Adjustments for Prior Year – Reports any reductions in QTRE from previous years, which might require recalculating prior tax credits.
  • Box 5: Scholarships or Grants – Lists the amount of scholarships, grants, or other aid applied to QTRE, which can reduce your eligible expenses for tax credits.
  • Box 6: Adjustments to Scholarships or Grants for a Prior Year – Similar to Box 4, this adjusts prior-year aid amounts.
  • Box 7: Checkbox for Amounts for an Academic Period Beginning in the Next Year – Indicates if Box 1 includes payments for terms starting in the first three months of the following year (e.g., spring 2026 terms paid in late 2025).
  • Box 8: At Least Half-Time Student – Checked if you were enrolled at least half-time, which is key for AOTC eligibility.
  • Box 9: Graduate Student – Checked if you were a graduate student.

Understanding these boxes helps you accurately report expenses on your tax return.

How to Use Form 1098-T for Education Tax Credits?

The primary purpose of the 1098-T is to support claims for education tax credits on your IRS Form 1040. You’ll use IRS Form 8863 (Education Credits) to calculate and claim these. Here’s how it ties in:

  • American Opportunity Tax Credit (AOTC): Up to $2,500 per eligible student for the first four years of higher education. Requires at least half-time enrollment and covers 100% of the first $2,000 in QTRE plus 25% of the next $2,000. Use Box 1 minus Box 5 to figure qualified expenses.
  • Lifetime Learning Credit (LLC): Up to $2,000 per tax return (20% of up to $10,000 in QTRE). No enrollment minimum, making it ideal for part-time or graduate students.

Subtract scholarships (Box 5) from payments (Box 1) to find your out-of-pocket QTRE. If adjustments appear in Boxes 4 or 6, you may need to recapture prior credits, increasing your current tax liability. Always consult IRS Publication 970 for detailed eligibility.

Nonresident aliens generally aren’t eligible for these credits, but U.S. citizens and residents can benefit significantly.

Deadlines, Delivery, and How to Access Your 1098-T

Schools must send Form 1098-T to students by January 31 of the following year (e.g., January 31, 2026, for 2025). They file with the IRS by February 28 (or the next business day if on a weekend). Many institutions provide electronic access via student portals, and you may consent to receive it digitally.

If you haven’t received yours, check your school’s student account portal or contact the bursar’s office. Lost forms can often be reprinted online.

Common Issues and FAQs About the 1098-T Form

  • Why is Box 1 zero or low? It might reflect high scholarships reducing reportable payments, or payments applied to non-QTRE like housing.
  • Can I claim credits without a 1098-T? Generally, no, but exceptions exist (e.g., if the school isn’t required to issue one).
  • What if payments were for a future term? Box 7 will indicate this, and you may need to adjust for the correct tax year.
  • Do international students get a 1098-T? Only upon request, and they may not qualify for credits.

For personalized advice, consult a tax professional or use IRS tools like the Interactive Tax Assistant.

Final Thoughts on Maximizing Your College Tuition Tax Benefits

The 1098-T form is your gateway to potentially saving thousands on taxes through education credits. By understanding its details and using it correctly with Form 8863, you can make higher education more affordable. Remember, tax laws can change, so verify with the IRS for the most current rules. If you’re filing for 2025, gather your form early to avoid last-minute stress.

This guide is based on official IRS guidelines and trusted resources to help you navigate your college tuition tax form confidently. For more details, visit the IRS website or speak with a tax advisor.