This document is a kind of report made annually by the educational authorities about every student who has already paid for his studies or would have to pay for it.
This form is quite new, for it was created and put into effect a little over twenty years ago. It was modified several times during this period, and the edition currently used was approved five years ago, in 2016.
This tax form is prepared and then delivered to the Revenue Service every year by the post-secondary academic centers receiving payments of any kind for educational purposes from the students attending these centers. This document is compiled for every student for every academic year and must be submitted at the appointed time. It is prepared in three copies, one of which is provided to the student.
In order to carry out these activities, the training center must have a suitable status and legal rights. It means to conform to the following standards:
Generally speaking, the 1098-T Form has two main assignments:
It should be noted that only certain payments can be included in this form as related to the educational purposes, namely: the tuition expenses, school fees, and any other training materials needed to participate in or attend the lessons. Expenditures for any other courses, comprising sports, games, or hobbies, are not related to the qualified tuition purposes unless they are an essential part of the student’s degree program. The same applies to books or any other educational materials. Also, the expenses shown in the 1098-T Form can not include any payments for the accommodation and insurance, living and transportation, medical and family expenses.
The document we are talking about consists of one page that includes several lines and ten boxes to fill out. It is prepared in three copies. The “A” copy is directed to the IRS by the author of the document together with the 1096 Form. It can be sent by mail or electronically, and the deadline for sending it depends on the way of filing.
The “B” copy is assigned for the student. It must be delivered to him no later than by January 31, so he can use it for his educational purposes. It is important to mention here that the student’s copy may show only the four last digits of his TIN for security reasons. Nevertheless, the educational authority reports the complete number to the IRS.
The third copy is left by the filer for his own informational and reporting services.
Guide for Filling out the Tuition Statement
Though the 1098-T form is relatively short and includes only ten boxes, it still requires making some complicated counting. This process can be difficult and cause mistakes. Therefore we recommend using our form-building software to facilitate the process.
Write Down the Information to Identify the Filer and the Student
The first lines of this form require to indicate the name and all contact information of the person filling out the document, as well as to report the student’s TIN. The first line is assigned for the filer himself, not the name of the institution.
Put in the Name and Address of the Student
For the purpose of this form, the student’s permanent or long-term address is needed here so that the student could receive the mail. Certainly, it is possible to indicate the temporary address too, but only if the long-term address is unknown.
As for the line with the account number, it is required to fill out only if several accounts are used for this form purposes. Let us remind you that our built-in form filling software can help you with any uncertain or complicated issue in this form.
As for checkbox 8, it shows the degree of the student’s participation in the education process. It covers one of the most important conditions to acquire education credit.
Show the Total Amount of Payments Made During the Calendar Year
The figure in the Box 1 must show all the payments already received by the eligible institution where the student is currently studying. It indicates the means paid from any sources and includes payments for the tuition and all the other expenses related to the education.
Boxes 2 and 3 are usually left blank for future use.
Indicate Any Adjustments Made and Allowances Granted
The next two boxes – 4 and 6 – are used to indicate whether any corrections occurred during the previous year. Box 5 is for the total sum of any kind of stipends or subsidies given to the student within the calendar year. The latter amount will be considered when the student appeals to get the education credit and may reduce it.
Fill in If a Graduate Student and Any Refunds Were Made
One of the last two sections, Box 9, is to show whether a student participates in any of the educational programs, resulting in graduation. Box 10 is assigned to show the final quantum of refunds made by the insurer for the educational and any other associated purposes of this student.