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.
2018 Reporting Change
In years prior to 2018, your 1098-T included a figure in Box 2 that represented the qualified expenses that were billed to your student account during the calendar year. Due to a change in reporting requirements under federal law, beginning with tax year 2018, Baylor reports in Box 1 payments received during the year for qualified expenses.
Frequently Asked Questions about the Form 1098-T
Q1: What is reported in Box 1?
A1: 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.
Q2: How is Box 1 calculated?
A2: Box 1 represents payments made (net of refunds) during the calendar year, up to the total amount of qualified expenses incurred. Payments are considered to be applied first toward qualified expenses.
Q3: What payments are not included in Box 1?
A3: Payments for terms occurring prior to the first term of 2018 (spring) are not included in Box 1 because the information required to allocate those payments to the qualified expenses for those terms does not exist. The ability to report payments toward qualified expenses is possible for terms beginning after January 1, 2018, when Box 1 reporting became effective. Also not included in Box 1 are scholarships designated to pay non-qualified expenses.
Q4: What charges are considered qualified expenses?
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 85% 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.
Q5: Why are my tuition and fees not reported in Box 2 anymore?
A5: For tax years prior to 2018, 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. Baylor, like most of the nation's other major universities, reported amounts billed in Box 2. Box 2 reporting is not available for tax years 2018 and later.
Q6: Where can I find detail regarding the charges and payments on my account?
A6: In the E-Bill System, select Current 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, email Cashiers_Office@baylor.edu.
Q7: Why is my payment/scholarship for Fall 2017 (or earlier) not included in Box 1?
A7: As noted in A3 above, payments (including scholarships) for terms occurring prior to spring 2018 are not included in Box 1 because the information required to allocate those payments to the qualified expenses for those terms does not exist. The ability to report payments toward qualified expenses is possible for terms beginning after January 1, 2018, when Box 1 reporting became effective.
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.
Q8: The information on my 1098-T appears incorrect. I need different information to do my taxes.
A8: 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 A5 above for instructions for exporting 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.
Q9: Since Baylor is closed from Christmas Eve through New Year’s Day, how are payments received during the break be counted for 1098-T purposes?
A9: 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.
Q10: I have graduated from Baylor or am no longer a student and no longer have access to the E-Bill System, how can I access my 1098-T?
A10: 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.
For information regarding 1098-Ts for 2017 and earlier, click here.