Understanding The 1098-T Form

You, or the person who can claim you as a dependent, may be able to take either the tuition and fees deduction or claim an education credit on Form 1040 or 1040A for the qualified tuition and related expenses that were actually paid in 2013. The amount shown in box 1 or 2 may represent an amount other than the amount actually paid in 2013. For more information about the deduction or credit, see Pub. 970, Tax Benefits for Education, Form 8863, Education Credits, and the Form 1040 or 1040A instructions.

NOTE: It is up to each taxpayer to determine eligibility for the credits and how to calculate them.

example of the 2013 1098-T Form

Box 1–Payments received

Shows the total payments received from any source for qualified tuition and related expenses less any related reimbursements or refunds. 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. GU reports qualified tuition and related expenses that were billed during the tax year and scholarships and grants, therefore, Box 1 – Payments Received for Qualified Tuition and Related Expenses, will be blank.

Box 2-Amounts Billed for Qualified Tuition and Related Expenses


Shows the total amounts billed for qualified tuition and related expenses less any related reductions in charges. The amount shown in box 2 for qualified tuition and related expenses billed during the calendar year may represent an amount that is different from the amount actually paid during the calendar year, although for many students the amounts will be the same. For purposes of the Form 1098-T provided by Grace University, the following categories of charges are included or not included in qualified tuition and related expenses:

Included

Not Included

  • Graduate and Undergraduate Tuition
  • Student Fees
  • Assessment Fees
  • Residence Hall Charges
  • Application Fees
  • Transcript Fees
  • Diploma Fees
  • Advances for books and other expenses that were issued directly to the student

Under section 25A of the Internal Revenue Code and the associated regulations, a taxpayer may take a tuition and fee deduction or claim an education tax credit only with respect to qualified tuition and related expenses actually paid during the calendar year. You may not be able to take a tuition and fee deduction or claim an education credit with respect to the entire amount billed and reported in box 2. For more information regarding the qualified educational expenses please go here.

Box 4-Adjustments Made For a Prior Year


Shows any adjustment made for a prior year for qualified tuition and related expenses that were reported on a prior year Form 1098-T. The amount reported in Box 4 represents a reduction in tuition billed during a prior calendar year. For example, if you were billed for classes that you dropped after the 1098-T was mailed out the charges will be reported as a reduction on the following year. This amount may reduce any allowable education credit you may claim for the prior year. See Form 8863 or Pub. 970 for more information.

Box 5-Scholarships or Grants

Box 5 of Form 1098-T reports the total of scholarships or grants administered and processed by the GU Student Finance Office during the calendar year. The amount of scholarships or grants for the calendar year (including those not reported by GU) may reduce the amount of any allowable tuition and fees deduction or the education credit you may claim for the year. The amount reported in Box 5 does not include:

  • Student loans; for example, subsidized, unsubsidized, PLUS, Perkins, and alternative loans.
  • Federal work-study.
  • Funds received from the Department of Rehabilitative Services.
  • Scholarships, grants, and reimbursements not administered or processed by GU.

Box 6-Total adjustments to scholarships or grants for a prior year


This amount may affect the amount of any allowable tuition and fees deduction or education credit you may claim for the prior year. The amount reported in Box 6 represents a reduction in scholarships or grants reported for a prior calendar year. See Pub. 970 for instructions on how to report these amounts.

Box 7

If this box is checked, the amount in box 1 or 2 includes amounts for an academic period beginning January-March 2013. See Pub. 970 for how to report these amounts.

Box 8

Shows whether you are considered to be carrying at least one-half the normal full-time workload for your course of study at GU. If you are at least a half-time student for at least one academic period that begins during the year, you meet one of the requirements for the Hope credit. You do not have to meet the workload requirement to qualify for the tuition and fees deduction or the Lifetime Learning Credit.

Box 9

Shows whether you are considered to be enrolled in a program leading to a graduate degree, graduate-level certificate, or other recognized graduate-level educational credential. If you are enrolled in a graduate program, you are not eligible for the Hope credit, but you may qualify for the tuition and fees deduction or the Lifetime Learning Credit.

Box 10

Shows the total amount of reimbursements or refunds of qualified tuition and related expenses made by an insurer. The amount of reimbursements or refunds for the calendar year may reduce the amount of any allowable tuition and fees deduction or education credit you may claim for the year.

PLEASE NOTE: Not ALL boxes need to be populated. Box 1 will be empty. In many cases, boxes 4, 6, and 7 will be empty. Box 5 will ONLY be populated if you received scholarships or grants this year.

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