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If you paid qualified expenses during the year, you may be eligible for a federal education tax deduction or credit, depending on your income (or your family’s income, if you are a dependent) and enrollment status. Baylor University is unable to provide individual tax advice; please refer to IRS Publication 970 and if you have questions, we recommend seeking the counsel of an informed tax preparer or adviser.
A1: The 1098-T is a statement that colleges and universities are required to issue to each student that is enrolled and for whom a reportable transaction is made.
The 1098-T provides tax information to both the taxpayer and the IRS which may be useful in determining eligibility for tax credits and/or deductions. Either the student or the person that claims the student as a dependent may be eligible for tax credits and/or deductions on his/her individual income tax return for qualified tuition and related expenses.
Please note that the 1098-T may not provide all of the information you need to determine eligibility and you will also need your personal financial records. Eligibility for any tax benefit depends upon your individual facts and circumstances. The University cannot provide tax advice. Please consult the IRS or a tax professional to find out more about education credits and deductions and your eligibility.
A2: Students and authorized users (if the student has granted access) can access to view or print 1098-T forms online through the E-Bill System. Step-by-step instructions for accessing the 1098-T electronically can found here.
A3: For tax years 2018 and later, Box 1 shows payments received for qualified expenses during the calendar year. Payments from any source (scholarships, loans, personal payments) are counted with the exception of scholarships that are designated to pay non-qualified expenses (i.e., room, meals). Payments are reduced by any refunds issued during the year.
A4: For the purposes of 1098-T reporting, qualified expenses include “tuition, fees, and course materials required for a student to be enrolled at or attend” Baylor. Excluded from qualified expenses are charges for fees, room, meals, insurance, medical expenses, transportation, and similar personal expenses. Baylor has determined that 92.5% of the General Student Fee is a qualified expense.
For the purposes of claiming a tax credit, qualified expenses may include amounts paid for required books and supplies that were not paid to Baylor; refer to Instructions for Form 8863.
For the purposes of a Qualified Tuition Program (529 plan), qualified higher education expenses could in some circumstances include room, meals, or the purchase of a computer; refer to IRS Publication 970.
A5: There are potentially many reasons for this discrepancy. First, the amount in Box 1 only represents amounts paid for qualified tuition and related expenses (QTRE) and does not include payments made for room and board, insurance, health service fees, or parking which, though important, are not considered mandatory education expenses for tax purposes. Secondly, Form 1098-T reports amounts that the student paid in a certain year, and the pay date does not necessarily correspond to the dates that the classes were attended. For example, tuition for the Spring semester is typically billed in December so a student may have paid tuition for the Spring semester in 2018 despite the fact that classes didn’t start until 2019.
A6: For tax years prior to 2017, the IRS gave institutions the option to report payments received (Box 1), or amounts billed (Box 2) for qualified tuition and related expenses during the calendar year. Due to a change to institutional reporting requirements under federal law, beginning with tax year 2018, the University must report in Box 1 the amount of QTRE you paid during the year. Therefore, Box 2 reporting is no longer available for tax years 2018 and later.
A7: For Form 1098-T purposes, fellowships are considered financial aid and will be reported in Box 5 as a (scholarships, grants, fellowships). Form 1098-T reports activity occurring in the calendar year.
A8: Since insurance (both medical and dental) is not considered to be a qualified tuition and related expense, this expense it is not reported on your Form 1098-T. However, if the University subsidizes the cost of your insurance then the University subsidy is reported in Box 5 of the Form 1098-T.
A9: While your 1098-T has been prepared in accordance with IRS regulations and guidance, it is still an imperfect tax form and may not provide all of the information that you need to claim a tax deduction or credit. See A12 below for instructions for viewing your account details from the E-Bill System.
Further, the amounts reported on your 1098-T are based on the calendar year in which entries are posted to the student account. As a result, there can be timing differences that do not necessarily have tax consequences. If you have any questions about what to do with the information reported to you, please consider consulting a tax professional.
A10: Even though offices are closed, Baylor University continues to receive mail from both USPS and express mail services (e.g., FedEx, UPS) throughout the holidays. All payments received by December 31 were processed as of December 31.
A11: If a student no longer has access to the E-Bill System or the Authorized User is unable to view the 1098-T form in the E-Bill System, then the student will need to visit the Heartland ECSI website by clicking here. The 1098-T is prepared by Heartland ECSI, and their website allows former students to view both the current year’s form and those for prior years.
A12: In the E-Bill System, select Account Activity under My Account to view all account activity by term. Users can search, sort, and export as needed. To produce a report of payments, select Payment History under My Account and choose a date range to view. For additional information, contact the Student Financial Aid office.
A13: No. There is no requirement to attach the 1098-T to your tax return.
Q14: Yes. Internal Revenue Code §6050S requires educational institutions to file information returns to assist taxpayers and the Internal Revenue Service in determining eligibility for educational tax credits. The annual deadline for the University to file the required tax information electronically with the IRS is March 31, although data may be transmitted earlier as circumstances allow.
A15: The reporting rules for Box 5 have not changed. Box 5 continues to include all scholarship payments (related to any term) which were processed during the calendar year. If you believe a scholarship reported in Box 5 was used to pay qualified expenses but was not reported in Box 1, please refer to your billing statements and/or account details in the E-Bill System for additional documentation, and, if needed, consult a tax professional.
A16: Box 4 of Form 1098-T reports adjustments made to qualified tuition and related expenses 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.
Box 6 of Form 1098-T reports adjustments made to scholarships or grants reported on a prior year Form 1098-T in Box 5. The amount reported in Box 6 represents a reduction in scholarships or grants reported for a prior calendar year.
For information regarding 1098-Ts for 2017 and earlier, click here.