Can You File a 1098-T for a Foreign University?

Filing a 1098-T form for educational expenses is an important step for taxpayers seeking education-related tax credits in the United States. For students attending foreign universities, the process can be more complex. Understanding the requirements for filing a 1098-T for a foreign institution is essential for U.S. students studying abroad or attending international schools.

IRS Criteria for Foreign Institutions

For a foreign institution to issue a 1098-T form, it must be recognized as an eligible educational institution by the IRS. This requires the institution to participate in the U.S. Department of Education’s Federal Student Aid programs and meet accreditation standards similar to those for domestic institutions. Under Internal Revenue Code Section 25A, the institution must qualify for a student aid program administered by the U.S. Department of Education. Students can confirm their school’s eligibility by consulting the annually updated Federal School Code List, which ensures compliance with IRS requirements.

Documentation and Proof of Enrollment

Claiming education-related tax credits for foreign institutions requires comprehensive documentation. Students must provide official enrollment verification from the university, detailing their enrollment status, course of study, and program duration. If these documents are not in English, a certified translation is necessary for IRS acceptance.

Detailed records of educational expenses, including tuition payments, fees, and other qualified costs, are also essential. Receipts, invoices, and bank statements help substantiate claims and are critical in case of an audit. The IRS mandates keeping these records for at least three years from the filing date or two years from the date the tax was paid, whichever is later.

Qualified Expenses and Reporting

Qualified expenses include tuition, required fees, and course materials directly related to enrollment or attendance at an eligible institution. Personal expenses, such as room and board, do not qualify. Taxpayers must report only the amounts paid during the tax year they are filing for. Accurate reporting is crucial to avoid disallowed credits or penalties.

For foreign institutions, expenses paid in foreign currencies must be converted to U.S. dollars. Taxpayers can use the exchange rate on the transaction date or an annual average rate, as allowed by the IRS.

Alternatives When 1098-T Is Not Provided

When a foreign institution does not provide a 1098-T form, students can still claim education-related tax benefits by maintaining detailed documentation of tuition payments and qualified expenses. While the 1098-T is a helpful summary, it is not mandatory for claiming tax credits. Tuition bills, payment receipts, and bank statements can substantiate claims if they clearly demonstrate amounts paid and their connection to educational purposes.

IRS Publication 970 offers detailed guidance on claiming education credits without a 1098-T. Consulting this resource or seeking advice from a tax professional with expertise in education credits can help taxpayers navigate the complexities of reporting expenses tied to foreign institutions.