Form 1098-T indicates which expenses you paid that are qualified as educational expenses under IRS rules. If the school didn't send you a 1098-T, don’t panic. You can still file eligible education expenses on your federal income tax return. While the IRS usually requires a Form 1098-T for a student to claim the education credit, that’s not the case for the tax year 2018 under certain circumstances.
If you did not receive your IRS Form 1098-T from your school, you can still claim education credits and expenses, as long as you have records that prove you're qualified to claim them.
Reasons for No 1098-T Form
For the tax year 2020, an eligible educational institutional does not have to send a student Form 1098-T when any of these situations exist:
- The student is a nonresident alien. However, the student can request that the school file the form.
- Tuition and expenses are paid completely via grants and scholarships.
- For some students, the school will not maintain a separate financial account. For these students, the qualified educational expenses are paid either by the student’s employer or by a government agency, such as the U.S. Department of Defense or the U.S. Department of Veterans Affairs.
Other Situations for No 1098-T
If your school shut down during the year and didn’t send a Form 1098-T, you can still claim qualified educational expenses. To do this, you must have good records to prove that you or your child meet all eligibility requirements for education credits and expenses, and the student was in fact enrolled in the school prior to its closing. You must have evidence that tuition and expenses were paid to the school.
It’s possible that the IRS will contact you if you claim the credit without a Form 1098-T. You shouldn’t have a problem if your records verify all of the qualifications for the IRS.
How to Get a 1098-T
Educational institutions usually send Form 1098-T, a tuition statement, to the student and also a copy to the IRS. If you are supposed to receive a Form 1098-T for 2020, you should receive it by early February 2021. If you don't received the form, contact the school to find out if there is a problem.
You’ll find information about your qualified educational expenses in box 1 on the form. Box 2 used to include the amounts billed for qualified tuition and related expenses which is filled out by the filer; however, beginning in 2018, box 2 is greyed-out to prevent miscalculations.
Other data you’ll see on the form includes the amounts of scholarships, grants and any adjustments to prior year grants or scholarships. Form 1098-T includes the name, address and contact information of the higher educational institution you attended.
The two possible education credits you can claim, the American Opportunity and Lifetime Learning credits, are actually claimed on Form 8863 and submitted along with your 1040 form. You need a Form 1098-T in order to claim either of these credits.
Non-Qualified Educational Expenses
Students can claim qualifying tuition, books, mandatory fees and certain other expenses on their tax returns. However, some common expenses that are ineligible include room and board, transportation, medical expenses, insurance and personal living expenses. Unless a student is majoring in a specific degree program, expenses for games, sports, hobbies and noncredit courses do not count toward qualified educational expenses.
Read More: 5 Useful Apps for Paying off Student Loans
- IRS: Education Credits: Questions and Answers
- IRS: Qualified Education Expenses
- IRS: Instructions for Form 8863 (2017)
- IRS: About Form 1098-T, Tuition Statement
- Thomson Reuters: What a New IRS Change to Form 1098-T Means for Colleges and Students
- IRS: American Opportunity Tax Credit
- IRS: Lifetime Learning Credit
A graduate of New York University, Jane Meggitt's work has appeared in dozens of publications, including Sapling, Zack's, Financial Advisor, nj.com, LegalZoom and The Nest.