The 1098-T reports may have access to education expenses you paid in a tax year so you can claim education tax credits on your federal return

The Form 1098-T is a tax document that colleges and universities send to you and the IRS when you pay tuition, fees, or other education costs. It shows the amount of may have access to education expenses you paid during the tax year — money spent on tuition, required fees, course materials, and in some cases room and board. You use the information on this form to determine whether you can claim either the American Opportunity Tax Credit or the Lifetime Learning Credit on your federal tax return.

The form arrives in January or February of the year after you paid the expenses. For example, if you paid tuition in 2024, your school sends the 1098-T in early 2025. You receive Copy 2 (for your records), and the school files Copy 1 with the IRS. The IRS matches the form to your tax return to verify you reported the credits correctly.

Not every education expense appears on the 1098-T. Scholarships, grants, employer reimbursements, and student loan interest are handled differently on your tax return. The form only reports expenses the school considers may have access to and that you paid out of pocket or financed through loans.

Key Takeaways

  • The 1098-T shows may have access to education expenses paid during the tax year and is used to claim education tax credits on your federal return.
  • Schools report tuition, required fees, and course materials; scholarships and grants are reported separately and reduce the amount of expenses you can claim.
  • You receive the form in January or February for expenses paid in the prior tax year.
  • The form lists two boxes of expenses: Box 1 (may have access to tuition and fees) and Box 2 (scholarships or grants received), and you must subtract Box 2 from Box 1 to find your net may have access to expenses.

What boxes on the 1098-T mean and where to find them

The 1098-T has several numbered boxes, but the ones that matter for your tax return are Box 1 and Box 2. Box 1 shows the total may have access to education expenses the school reported you paid. This includes tuition, required fees, and course materials (textbooks, supplies, equipment) that the school requires for enrollment. Box 2 shows scholarships, grants, or other education awards the school paid on your behalf during the same tax year.

To find your actual out-of-pocket expenses, you subtract Box 2 from Box 1. If Box 1 is $8,000 and Box 2 is $3,000, your net may have access to expenses are $5,000. This net amount is what you use to calculate your education tax credit. The form also includes boxes for the student's name, Social Security number, and the school's name and tax ID so the IRS can match it to your return.

Box 5 indicates whether the student is enrolled at least half-time, which affects which credit you can claim. Some boxes may be blank if they do not explore to your situation — for example, if you received no scholarships, Box 2 will be empty.

Scholarships and grants reduce your may have access to expenses on the 1098-T

When you receive a scholarship or grant that the school applies to your tuition bill, that amount appears in Box 2 of your 1098-T. The IRS requires you to subtract scholarships and grants from your may have access to expenses before you calculate your tax credit. This rule prevents you from claiming a credit on money you did not actually pay.

If your scholarship covers all your tuition and fees, Box 1 and Box 2 will be equal, leaving you with zero net may have access to expenses and no credit to claim. If your scholarship covers part of your costs, you subtract it from the total and claim a credit only on what you paid yourself. Employer-provided education information and student loan interest are reported on different forms and do not reduce your 1098-T expenses.

When you do not receive a 1098-T but paid education expenses

Some students pay may have access to education expenses but do not receive a 1098-T. This happens when you attend a school that does not issue the form, pay expenses the school does not report, or pay for a program that does not meet IRS requirements. You can still claim an education tax credit in these cases, but you must gather your own documentation: receipts, tuition bills, fee statements, and proof of payment.

You will need to calculate your may have access to expenses yourself and report them on the appropriate tax form (Form 8863 for the American Opportunity or Lifetime Learning Credit). Keep copies of all receipts and bills in case the IRS asks for proof. Some schools do not issue 1098-Ts because they are not may be able to access institutions under IRS rules, so confirm with your school whether they report to the IRS before assuming you will receive the form.

How the 1098-T connects to the two education tax credits

The 1098-T provides the expense information you need to claim one of two federal education tax credits: the American Opportunity Tax Credit or the Lifetime Learning Credit. You cannot claim both credits in the same tax year for the same student. The American Opportunity Credit allows up to $2,500 per student per year and requires the student to be enrolled at least half-time in a degree program. The Lifetime Learning Credit allows up to $2,000 per return (not per student) and has no enrollment requirement.

The amount of credit you receive depends on your may have access to expenses (Box 1 minus Box 2 on the 1098-T) and your income. Higher income can reduce or eliminate your credit. You report the expenses from your 1098-T on Form 8863, which calculates which credit you can claim and how much. The IRS uses the 1098-T information filed by the school to verify that the expenses you reported match what the school reported.

Errors on the 1098-T and how to handle them

If the amounts on your 1098-T do not match what you paid, contact your school's financial aid or bursar office when ready. Common errors include expenses reported in the wrong year, scholarships listed in Box 2 that should not be there, or amounts that do not match your bills. The school can issue a corrected form (marked as a correction) if the error is on their end.

If you believe the school made an error but they disagree, you can still file your tax return with the correct amounts you paid and keep documentation to support your numbers. The IRS may contact you if your reported expenses differ from what the school filed, so having receipts and bills is important. Do not ignore a mismatch — address it with the school or be prepared to explain it to the IRS.

Frequently Asked Questions

Do I have to use the 1098-T to claim an education tax credit?

No. The 1098-T is a reporting document, not a requirement. If you paid may have access to education expenses but did not receive a 1098-T, you can still claim a credit by calculating your expenses yourself and providing documentation. However, if the school filed a 1098-T with the IRS, you should report the same amounts on your return to avoid a mismatch.

What if I paid education expenses but my school did not send me a 1098-T?

Contact your school's financial aid office and ask why. Some schools do not issue 1098-Ts because they are not may be able to access institutions, or because you did not meet their reporting threshold. If the school confirms they will not issue one, gather your own receipts and bills and calculate your may have access to expenses to claim the credit yourself.

Can I claim a tax credit if my scholarship covered all my tuition?

No. If your scholarship or grant equals or exceeds your tuition and fees, your net may have access to expenses (Box 1 minus Box 2) will be zero or negative, and you cannot claim a credit. The credit is only available on expenses you paid out of pocket.

Does the 1098-T include room and board?

Room and board is only included on the 1098-T if the student lives on campus and the school requires it as part of enrollment. If you live off campus or room and board is optional, it does not appear on the form and cannot be used to claim a credit.

What happens if the 1098-T amount does not match my actual expenses?

Contact your school when ready to verify the numbers. If the school made an error, they will issue a corrected form. If you paid more than the form shows, keep your receipts and bills. If the IRS questions the difference, your documentation will support your claim.