Tax Credit & 1098-T FAQs
Tax Credit & 1098-T FAQs
Information for Tax Year 2014
The Tax Payer Relief Act of 1997 includes provisions for the American Opportunity Credit and the Lifetime Learning Credit. Both credits allow certain taxpayers who have incurred qualified expenses for higher education to take a credit against their federal income tax liability. Educational institutions are required by law to provide information to students who qualify for the education credits. Schools, colleges and universities report this information to the IRS and to students on Form 1098-T. The 1098-T form should not be attached to your federal income tax return when you claim the education credits (as W-2 forms are); however, you must have received this form in order to claim either the American Opportunity Credit or the Lifetime Learning Credit on your federal tax return.
The following is an explanation of what each box on the 1098-T form contains:
Box 1 - Payments received for qualified tuition and related expenses: This box will be left blank. Universities may choose whether to report payments received or amounts billed on student accounts; they need not report both amounts. Saint Louis University has chosen NOT to report qualified tuition and related expense amounts paid.
Box 2 - Amounts billed for qualified tuition and related expenses: In general, this box will contain the sum of all tuition, registration and required registration fees billed to a student's account during a calendar year, less any amounts by which tuition was reduced due to a reduction in course load or withdrawal. The amount reported is not reduced by the scholarships and grants reported in box 5.
Amounts billed to a student account for housing, fines, insurance or non-required fees will not be included in the Box 2 amount.
Please note that when the American Opportunity Credit or Lifetime Learning Credit is taken on the federal income tax return, the calculation of the credit is based on the amount of qualified educational expenses actually paid by the taxpayer during the calendar year. The University reports amounts billed to a student's account. Therefore, the amount you use to calculate your education credit will not necessarily be the same as the amount that appears in Box 2. You should use the information on the 1098-T form in conjunction with your own payment records to determine eligibility for the credits.
If you have questions about how to compute your education tax credit, you should consult your tax professional or refer to IRS Publication 970.
Box 3 - This box will be left blank, since Saint Louis University has not changed its current method of reporting from the previous year (2013).
Box 4 - Adjustments made for a prior year: The amount in this box should be the sum of all reductions in tuition (refunded or not) related to amounts billed in a prior year. This amount is reported as a positive number per IRS requirements. However, it is actually a decrease to the amount that was reported on a prior year 1098-T. See "recapture" in the index to Pub. 970 to report a reduction in your credit or deduction.
Box 5 - Scholarships or grants: This box contains the sum of all scholarships and grants Saint Louis University administered and processed for the student's account during the calendar year. Awards included in this amount may pay qualified tuition expenses as well as housing, books, and other non-qualified expenses.
Box 6 - Adjustments to scholarships or grants for a prior year: Decreases or refunds of scholarship amounts related to scholarships reported in a previous year are included in this box. This amount is reported as a positive number per IRS requirements. However, it is actually a decrease to the amount that was reported on a prior year 1098-T. You may have to file an amended income tax return for the prior year.
Box 7 - This box will be checked if the amount reported in Box 2 includes tuition or registration fees billed to a student account in the current year that pay for a semester beginning in the next calendar year. For example, tuition billed in December 2014 for Spring semester 2015 will be reported on your 2014 1098-T. Box 7 will be checked to indicate that this is the case.
Box 8 - A check in this box indicates that you are or have been enrolled at Saint Louis University at least half-time for at least one semester during the calendar year.
Box 9 - This box will be checked if you are a student enrolled in a program leading to a graduate-level degree.
Box 10 - This box is not used by Saint Louis University, so it will be blank.
1. Why is box 1 marked as "INTENTIONALLY BLANK?"
Box 1 is marked as INTENTIONALLY BLANK for all SLU students. Schools are directed by IRS to choose a method of reporting, either by reporting the payments received for qualified tuition in box 1 or by reporting the amounts billed for qualified tuition in box 2. SLU has chosen the latter method.
This does not mean your "payments received for qualified tuition and related expenses" are zero. Please review all payments and other credits applied to your account during the year via your MYSLU account
2. I attended SLU during Spring Semester 2014, but some or all of those amounts are missing from my Form 1098-T. Why?
Form 1098-T reports only those transactions that posted to your student account during calendar year 2014. Spring Semester begins in January. Most students registered for Spring Semester 2014 during the previous November or December. Some students also paid for Spring Semester in December 2014. Any charges that were billed to your account before January 1, 2014, were reported on your 2013 Form 1098-T.
3. I am attending SLU during Spring Semester 2015, but some or all of those amounts are missing from my Form 1098-T. Why?
Form 1098-T reports only those transactions that posted to your student account during calendar year 2014. Spring Semester begins in January. If you registered, dropped or added classes, for Spring Semester 2015 after December 31, 2014, those amounts will be reported on your 2015 Form 1098-T, which will be available in January 2016.
4. Does my Form 1098-T tell me everything I need to know for tax purposes?
Probably not. Your Form 1098-T reports all transactions that flowed through your student account during the calendar year. However, students typically incur other expenses that may also qualify for tax credits or deductions. The most common example is textbooks. Other examples of qualified and nonqualified expenses not reported on your Form 1098-T may include class fees for study-abroad classes, off-campus housing expenses, and other fees you paid directly to your academic department or college instead of to SLU You should rely on your own financial records and receipts to document those expenses. For further information on "qualified" education expenses, please review IRS Publication 970, Tax Benefits for Education. You may wish to consult with a tax professional.
5. I receive stipends from SLU. Are they included on my Form 1098-T?
That depends on how SLU classified your "stipends" for tax purposes. If your stipends represent wages you have earned, then you have probably been receiving them in the form of a regular paycheck and may have had taxes and/or other amounts withheld from them. In that case, your wages will be reported fully on Form W-2, Wage and Tax Statement. Those wages are not included anywhere on your Form 1098-T.
If your stipends represent a scholarship or fellowship awarded to you on the basis of academic merit and/or financial need, and not as wages you have earned, then you have probably received them as credits flowing through your SLU student account. In that case, your scholarships and fellowships are reported in box 5 (Scholarships or grants) of your Form 1098-T.
6. Do I need to report my scholarships as taxable income?
Scholarships that pay for qualified tuition and related expenses are not taxable to the student. However, if any portion of your scholarships paid for Nonqualified expenses, then you may be responsible for reporting such portion as taxable income on your tax return. For further guidance, please review IRS Publication 970, Tax Benefits for Education.
Foreign students who are nonresident aliens for tax purposes should also review IRS Publication 519, US Tax Guide for Aliens.
7. How is tuition remission reported on my Form 1098-T?
Any tuition remission benefit you received will be reported in box 5 Scholarships or grants.