What You Need to Know About the 1098-T Form

Darlene Leal
Staff Reporter

The last day to file taxes in 2019 is April 15. Graphic made by Zac Wright.

It’s everyone’s favorite time of the year: tax season. And with the most recent tax changes, there have been some updates to the education tax credit – the American Opportunity Tax Credit (AOTC) – and what you can claim.

The AOTC is a tax credit that students can claim on their taxes. It can credit up to $2,500 dollars of the cost of tuition. According to the IRS website, “You reduce the amount of tax you owe dollar for dollar by the amount of the AOTC for which you qualify up to the amount of tax you owe. If the amount of the AOTC is more than the tax you owe, then up to 40 percent of the credit (up to $1,000 dollars) can be refunded to you.”

In order to claim the AOTC, law requires the taxpayer to be dependent and have received the 1098-T form. All students that qualify to receive the form can access it online. RU is required by law to mail the forms to those students that did not consent to only receiving their forms electronically. If needed, previous years, beginning with 2014, are also now accessible on RUACCESS.

RUACCESS is also where there was a message letting students know that there were changes made to the 1098-T form a few months back.

What were those changes?

Director of Financial Aid Services Michelle Stipp Parzy was able to explain the difference made to the form.

In the past, universities had the choice to report Box 2 – Charges Billed Or Box 1 – Payments Received for Qualified Tuition and Related Expenses. Per an IRS mandates change for tax year 2018, all universities are now required to report Box 1 – Payments Received for Qualified Tuition and Related Expenses. Box 2 – Charges Billed is no longer a reporting option is blank on the form.

Stipp Parzy said that most universities were using the amount billed to report on the 1098-T, but now the IRS went back and said everyone has to do the qualified tuition related expenses.

This seemed to have caused some confusion with Roosevelt students. “If you made payments for your spring, we can’t count that unless it happened within the tax year,” Stipp Parzy said.

“For example, a question we’ve been getting a lot is that students are looking at their 1098-T and maybe only seeing one semester of tuition. Because again, it’s driven by the tax year. So if you registered for your spring class in Nov. of 2017 it didn’t happen in 2018. So, it can’t be reported in 2018,” Stipp Parzy said.

Stipp Parzy said that confusion seemed to be the biggest motivator for the question they’ve been receiving since the tax form has gone into effect. “That is the biggest question we’ve seen with the 1098-T,” Stipp Parzy said.

There is no certain reasoning behind the change. “Because institutions had a choice, it may have been that they wants everyone to take the same approach. So they just kind of said this is what everybody is going to do going forward,” Stipp Parzy said.

“So that way, no matter where you go to school, theoretically, your 1098-T will be calculated the same,” Stipp Parzy said.She also recommended that students should visit the Roosevelt website if there is any further confusion on the tax forms. “Whenever a student comes in to meet with us, this is what we pull up so we can get the right information.” Stipp Parzy said.



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