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Form 1098-T Reporting
Refresher
FOCUS FALL 2012
BURSAR SESSION
Today’s Agenda
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 Introduction
 Overview of education tax credits
 1098-T reporting requirements
 Issues for Bursar Office
 What’s changed since last year
The 2012 Form 1098-T
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Requirements
Education Tax Credit for 2012
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 The Hope Scholarship Credit has been replaced
by the American Opportunity Tax Credit
Requirements
Education Tax Credit for 2012
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 The Hope Scholarship Credit has been replaced
by the American Opportunity Tax Credit
Requirements
Education Tax Credit for 2012
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 The American Opportunity Tax Credit can be
used for all four years of post-secondary
education and includes expenses for courserelated books, supplies and equipment that are
not necessarily paid to the educational institution
 The Lifetime Learning Credit – up to
$2,000 for qualified education expenses paid for
all eligible students. No limit on the number of
years this credit can be claimed.
Requirements
Advantage of Tax Credits
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 Tax credits are a direct reduction of taxes owed and
are not an itemized deduction
 American Opportunity Tax Credit - Up to $2,500 of
the cost of tuition, fees and course materials paid
during the taxable year. Also, 40% of the credit (up
to $1,000) is refundable. This means you can get it
even if you owe no tax.
 Lifetime Learning Credit – Up to $2,000 of the cost
of tuition, fees and related expenses such as student
activity fees and expenses for course-related books,
supplies and equipment.
Requirements
What Is Not a Qualified Education Expense?
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Sports or hobby-related course fees and any noncredit course
fees, unless
• It’s part of the student’s degree program
• Helps the student acquire or improve job skills (Lifetime Learning only)
Personal Expenses
• Room
• Board
• Medical (including student health fees)
• Transportation
Nonacademic fees
• Student fees
• Athletic fees
• Technology fees
• Insurance
Requirements
Eligible Educational Institutions
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 Must file for each student enrolled for whom a
reportable transaction is made.
 Have a choice of reporting payments received or
amounts billed for qualified tuition and related
expenses.
Requirements
Eligible Educational Institutions
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 Do not have to file a 1098T for:
Non-credit courses
 Non-resident alien students unless requested by the
student
 If qualified tuition and related expenses are covered
entirely by scholarships or grants
 Students for whom you do not maintain a separate
financial account and whose qualified tuition and related
expenses are covered by a formal billing arrangement.

Requirements
Box 5. Scholarships and Grants
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 Total amount of any scholarships or grants that you
ADMINISTERED and PROCESSED during the
calendar year for the payment of the student’s cost of
attendance.
 All 3rd party payments – excludes family members
and loan proceeds – but includes private and
governmental entities such as DOD, civic and
religious organizations and nonprofit entities.
Requirements
Deadlines – check this out
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 File with the IRS
 Paper copies (if total forms furnished are less than 250) file by
February 28, 2013
 Electronic filing (required for 250 or more forms) due April 2,
2013
 Furnish to students by January 31, 2013
 In the mail by or on January 31
 Available electronically – student must opt into electronic to
exclude mailing the paper version
Requirements
Issues for the Bursar Office
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 Electronic delivery
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Issues
Educational institutions may give students the option to
consent to receive Form 1098‐T electronically as part of a
global “Consent to do Business Electronically,” combining
consent for electronic delivery of Form 1098‐T along with
other institutional student business functions such as
admissions, registration, billings, and direct deposits. The
global consent process must meet all the consent, disclosure,
format, notice, and access period requirements for electronic
furnishing of Forms 1098‐T as required by paragraphs (a)(2)
through (6) of Treasury Regulations 1.6050S‐2. For more
information about the requirements to furnish a statement to
each student, see part M in the 2011 General Instructions for
Certain Information Returns.
Paid or Billed During the Calendar Year
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 Big Decision – which box
to use?
Requirements
 Box 1 – to report all
payments (Payments
include scholarships)
 Box 2 – to report total
tuition charges
****More About Payments or Amounts Billed
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 Box 3 – change your
method for Box 1-2?
 Box 4 – Adjustments depend on your method
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For any prior period after 2002
 Box 7 – payments or
charges for academic
periods next calendar
year?
Requirements
Scholarships and Grants
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 Box 5 – scholarships or
grants administered by
your institution during
the calendar year
 Box 6 – any reduction of
scholarship and grants
for any prior period after
2002
Requirements
Scholarships and Grants
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 A payment that is excludable from gross income
(other than gifts, bequest, and alike)
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
IRC Section 117 (qualified scholarships)
IRC Section 127 (educational assistance programs)
 Education assistance under US Code
 Title 10, chapter 1606 (educational assistance for members of
the selected reserve)
 Title 38, chapters 30, 31, 32, 34, 35 (related to veteran’s
benefits)
Requirements
Post-9/11 Veterans Educational Assistance Act of
2008
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 For financial aid purposes, VA benefits should not be
considered as a resource
 For 1098-T reporting, VA benefits would be
considered a Scholarship or Grant reported in Box 5
 Publication 970, Tax Benefits for Education,
provides guidance to taxpayers
Requirements
Student Status During the Calendar Year
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 Box 8 – checked if the
NOTE: you may be
asked for 2 1098Ts for
a student who
graduated in May and
entered Grad school in
August – can’t do
Requirements
student was at least halftime during any academic
period
 Box 9 – checked if student
was seeking graduate
degree
 Box 10 – not applicable
What Bursar Staff May Hear
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 I want two 1098Ts – one for the undergrad when my
father paid and one for the grandmother who is
paying for the grad tuition. (WHAT?)
 Why was prior year grant funds returned listed on
this year’s form? (Returned funds SAP, over award)
 My tax accountant said that you would give me a
form with payments instead of charges. (Read the
form instructions)
Issues
What Bursar Staff May Hear
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 I am the parent and I paid the bills so I want the
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1098T to be mailed to me.
I paid a lot more than you have on this form.
I haven’t received my tax form.
Why doesn’t the form have my payments?
I graduated in May but didn’t get a 1098T, why?
Issues
Issues for the Bursar Office
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 “Charges” - Bill in December but semester starts in
January? Due date January/Due date December
 “Payments” – Receive payment in December but
don’t bill until January?
 Enrollment changes, domicile changes
Issues
Issues for the Bursar Office
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 1098Ts returned by the Post Office
 No SS# for students with qualified tuition
 Students with international addresses
 International students with qualified tuition
 Student reports a wrong name or wrong SS#
Issues
Issues for Bursar Offices
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 Five-year masters programs – when do you
“check” the grad box?
 How do you handle outside scholarships?
i.e. civic organizations, high schools, banks,
when the check is made payable to the
institution and/or the student?
 Americorps/ Jobcorps?
Issues
Issues for the Bursar Office
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 How do you post payments from other universities
or colleges?
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Issues
At JMU, depends on what the “payer” indicates:
 Georgetown – TAP – 3rd party payment
 Duke, Johns Hopkins, Yale – Scholarship
What’s Changed Since Last Year?
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 Review your 2012 1098-T reporting to ensure
information is correct
Have there been changes in your student system that
need to be updated in your 1098-T reporting?
 Electronic filings with the IRS could fail if boxes 8 and 9
has invalid characters
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What's Next
Resources
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 http://www.irs.gov/formspubs/index.html
Instructions for the form 1098-T
 Publication 970
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 http://www.nacubo.org/documents/EventsandP
rograms/1098T_Webcast_FAQ.pdf
What's Next