When Do 1098-T Forms Come Out? & What to Know

The Form 1098-T, Tuition Statement, is an important tax document for students and their families. This form assists taxpayers in determining their eligibility for education-related tax credits, which can reduce the amount of income tax owed.

What is the 1098-T Form

The 1098-T form is an informational statement issued by eligible educational institutions to report qualified tuition and related expenses. It is not an invoice or a bill, but rather a document that summarizes financial transactions relevant to educational costs during a calendar year.

Qualified education expenses generally include tuition and fees required for enrollment or attendance at an eligible educational institution. Other expenses, such as room and board, insurance, medical expenses, transportation, and similar personal or living expenses, are typically not considered qualified education expenses for the purpose of this form.

When and How You Receive Your 1098-T

Eligible educational institutions are required to provide Form 1098-T to students by January 31st of the year following the calendar year in which the expenses were incurred. For instance, for expenses paid in 2024, the form must be issued by January 31, 2025.

Not all students receive a 1098-T form. Institutions are generally not required to issue one if a student’s qualified tuition and related expenses are entirely covered by scholarships or grants, or if the student is a non-resident alien. Additionally, students enrolled in courses for which no academic credit is offered may not receive this form.

Educational institutions typically deliver the 1098-T either by mail to the student’s permanent address or electronically through a secure student portal. If a student does not receive a form by the deadline or finds discrepancies, they should contact their educational institution directly to inquire about it or request a copy.

Using Your 1098-T for Tax Purposes

The 1098-T form provides details for calculating education tax credits. Box 1 on the form reports the total payments received by the institution for qualified tuition and related expenses during the calendar year. Box 5 indicates the total amount of scholarships or grants administered and processed by the institution, which can reduce the amount of qualified expenses eligible for a credit.

This information is essential for claiming education tax credits like the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC). The AOTC can provide a maximum annual credit of $2,500 per eligible student for the first four years of higher education, with certain income limitations. The LLC can offer a maximum credit of $2,000 per tax return, calculated as 20% of the first $10,000 in qualified expenses, and is available for undergraduate, graduate, and professional courses.

Taxpayers should always retain their personal payment records, such as receipts and bank statements. The information on the form may not always capture all qualified education expenses paid, or it might reflect expenses paid in a different tax year than when the academic period occurred. Using personal records in conjunction with the 1098-T ensures accurate reporting of eligible expenses.

Institutional Reporting Obligations

Beyond providing the forms to students, eligible educational institutions have reporting obligations to the IRS. Institutions must file copies of the 1098-T forms with the IRS by certain deadlines. For paper filings, the deadline is February 28th, while for electronic filings, it is March 31st of the year following the calendar year of the reported expenses.

Electronic filing is mandatory if an institution files more than 10 information returns. Failure to file timely and accurate 1098-T forms with the IRS can result in penalties for the institutions. Penalties can vary, emphasizing compliance for educational providers.