What is the 1098-T Form?
The 1098-T form is used by eligible educational institutions to report information about their students to the IRS as required by the Taxpayer Relief Act of 1997. Eligible educational institutions are required to submit the student's name, address, and taxpayer's identification number (TIN), enrollment and academic status. Beginning with 2003, educational institutions must also report amounts to the IRS pertaining to qualified tuition and related expenses, as well as scholarships and/or grants, taxable or not. A 1098-T form must also be provided to each applicable student. While it is a good starting point, the 1098-T, as designed and regulated by the IRS, does not contain all of the information needed to claim a tax credit. There is no IRS requirement that you must claim the tuition and fees deduction or an education credit. Claiming education tax benefits is a voluntary decision for those who may qualify.
Why did I receive a 1098-T and what am I supposed to do with it?
In January of each year, Weill Cornell Medical College mails Form 1098-T to all students who had qualified tuition and other related educational expenses billed to them during the previous calendar year. This form is informational only and should not be considered as tax opinion or advice. It serves to alert students that they may be eligible for federal income tax education credits. Receipt of Form 1098-T does not indicate eligibility for the tax credit. To determine the amount of qualified tuition and fees paid, and the amount of scholarships and grants received, a taxpayer should use their own financial records.
NOTE: It is up to each taxpayer to determine eligibility for the credits and how to calculate them.
Did you send a copy of this form to the IRS?
Yes. Section 6050S of the Internal Revenue Code, as enacted by the Taxpayer Relief Act of 1997, requires Weill Cornell Medical College to file information returns to assist taxpayers and the Internal Revenue Service in determining eligibility for the Hope and Lifetime Learning education tax credits.
Why isn't there an amount in box 1?
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. Weill Cornell Medical College reports qualified tuition and related expenses that were billed during the tax year (Box 2) and scholarships and grants, therefore, Box 1 - Payments Received for Qualified Tuition and Related Expenses, will be blank.
What is the Hope Credit and the Lifetime Learning Credit and what are allowable tuition and fee tax deduction for each?
Not all students who pay qualified expenses are eligible for a tax credit. For example, both credits have an income cap. Students who have a Modified Adjusted Gross Income (MAGI) greater than or equal to $62,000, or $ 124,000 for those filing a joint return, are not eligible for the Hope or Lifetime Learning credit.
The information provided may help you determine if you may be eligible for a tax credit. If you are eligible for both, it will help you decide which to claim. Each student can only claim one of these tax credits per year. You are also prohibited from claiming a tuition and fees deduction and an education tax credit for the same student for the same year. Publication 17 includes a number of useful real-life examples. Publication 970 explains tax benefits for education: http://www.irs.gov/publications/p970/index.html
I paid my qualified tuition and related expenses with student loans. Can I still claim a Hope or Lifetime Learning Tax Credit or Higher Education Tuition and Fees Deduction?
Yes. Loan funds should be considered in the same manner as cash payments when calculating a Hope or the Lifetime Learning Tax Credit or the Higher Education Tuition and Fees Deduction. However, any scholarships, grants, or other non-taxable aid must be deducted from the amount of qualified tuition and related expenses paid. The credit is claimed in the year in which the expenses are paid, not in the year in which the loan is repaid.
If I pay college tuition and fees with a scholarship, can I claim an education credit on Form 8863 for those payments?
No. You cannot claim a credit for the amount of higher education expenses paid for by tax-free scholarships. Weill Cornell Medical College will not issue a form 1098-T if your grant and scholarship are greater than your tuition For more information, please visit the IRS website.
How do I get a reprint of my 1098-T form?
If you did not receive a 1098-T due to a change of address, or you misplaced the form, we can provide you a copy. Please contact Denise Lebron at telephone number (212)746-2165 or by email: firstname.lastname@example.org
Can I get a copy of a prior year 1098-T?
Yes, provided that a form was issued to you. Please contact Denise Lebron at telephone number (212)746-2165 or by email: email@example.com
Why is Box 1 of my 1098-T Blank?
Box 1 (Payments received for qualified tuition and related expenses) is blank because WCMC reports "Amounts billed". The IRS provides the option for universities/college to report either "Payments received" in Box 1 OR "Amounts billed" in Box 2, but not both. WCMC elected to report "Amounts billed." IRS regulations prevent the college from changing our reporting method for a current or prior tax year.
Again , while it is a good starting point, the 1098-T, as designed and regulated by the IRS, does not contain all of the information needed to claim a tax credit. Most of the information needed must come from the student's personal financial records of what the student paid during the calendar year. Each taxpayer and his or her tax advisor must make the final determination of qualifying expenses
What does the amount in Box 2 mean?
Box 2 (Amounts Billed for Qualified Tuition and Related Expenses) reflects the "qualified tuition and expenses" billed to your account during the tax year. "Qualified tuition and expenses," as defined by the IRS, includes tuition and related fees that are required for enrollment or attendance by the University/College. The amount reported is the total amount billed less any reductions in charges made during the calendar year that relate to the amounts billed for qualified tuition and related expenses during the same calendar year. The amount reported is not reduced by scholarships and grants reported in box 5.
What does the amount in Box 4 mean?
Box 4 (Adjustments made for a prior year) reflects any refunds of tuition and fees billed in a prior tax year.
What does the amount in Box 5 mean?
Box 5 (Scholarships or Grants) reflects any scholarships or grants administered and processed during the calendar year for the payment of the student's costs of attendance. Scholarships and grants generally include all payments received from 3rd parties (excluding family members and loan proceeds). This includes payments received from governmental and private entities such as the Department of Veterans Affairs, the Department of Defense, civic, and religious organizations, and nonprofit entities.
This box does not provide you the information required to determine if any portion of these amounts are taxable. We encourage you to read IRS Publication 970, IRS Code Section 117, or consult your tax preparer to determine whether any grants, scholarships, remission, stipends, fellowships, or 3rd party payments may be taxable. For example, if ALL of the funds shown in Box 5 were used to pay only tuition, qualified fees, and books, it is possible that they can be excluded from taxable income. Scholarships are normally taxable if after tuition, qualified fees, and books, they are used to pay for housing, meals, insurance, travel and other non-qualified charges.
What does the check mark mean in Box 7 mean?
Box 7 (Checkbox for Amounts for an Academic Period Beginning in January through March 2014) relates to amounts billed, for qualified tuition and related expenses reported for the tax year which relates to an academic period that begins in January through March of the following year.