What the 1098-T form shows you

The 1098-T is a tax form that reports may have access to education expenses paid during the year. Schools send it to you and to the IRS to document money you spent on tuition, fees, books, and equipment for a student enrolled at least half-time in a degree or certificate program. The form itself does not give you a tax credit — it provides the numbers you need to claim one on your tax return.

You receive a 1098-T from the school if you paid at least $1 for may have access to expenses in that tax year. The form lists the expenses in boxes, organized by when they were paid and what type they were. You then use those numbers to calculate whether you can claim the American Opportunity Tax Credit or the Lifetime Learning Credit on your federal income tax return.

The 1098-T is not the same as a 1098-R or other 1098 forms. Those forms report different types of income or payments. The 1098-T is specific to education expenses only.

Key Takeaways

  • Schools mail the 1098-T by January 31 to report may have access to education expenses you paid in the previous calendar year.
  • The form shows expenses in separate boxes: tuition and fees in Box 1, scholarships in Box 5, and adjustments in Box 2.
  • You use the 1098-T numbers to calculate your may be able to access for the American Opportunity Tax Credit (up to $2,500 per student) or the Lifetime Learning Credit (up to $2,000 per return).
  • The 1098-T does not automatically claim a credit for you — you must report the numbers on your tax return to claim the credit yourself.
  • Scholarships and grants reduce the expenses you can claim, so Box 5 on the 1098-T matters as much as Box 1.

Where to find each box and what it means

The 1098-T has five main boxes that hold the numbers you need. Box 1 shows may have access to tuition and educational fees paid in the calendar year. This includes tuition, course fees, and lab fees — but not room, board, or transportation. Box 2 shows scholarships or grants the school paid out to you in that year. Box 3 shows adjustments the school made, usually because you received a refund or the school corrected an earlier report.

Box 5 is critical: it reports scholarships and grants that were not taxable to you. This number reduces the expenses you can claim for a tax credit. If Box 1 says $10,000 in tuition and Box 5 says $5,000 in scholarships, you can only use $5,000 toward a tax credit. Box 4 shows graduate-level expenses, which do not count toward the American Opportunity Credit but may count toward the Lifetime Learning Credit.

The form also has fields for the student's name, Social Security number, and the school's name and code. Check that the student name and number match your records before you file your tax return.

How scholarships and grants affect your numbers

Scholarships and grants reduce the amount of education expenses you can use to claim a tax credit. This is a rule the IRS enforces: you cannot claim a credit on money someone else paid for you. If a scholarship covered half your tuition, you can only claim a credit on the other half.

The 1098-T separates this information so you can do the math correctly. Box 1 shows what you (or your family) actually paid. Box 5 shows scholarships and grants that went toward may have access to expenses. To find the expenses you can claim, subtract Box 5 from Box 1. That result is the number you use when you calculate your tax credit.

Some scholarships are taxable to the student and some are not. Only non-taxable scholarships appear in Box 5. If a scholarship was reported as income on the student's tax return, it does not reduce your education expenses for credit purposes — but this situation is rare and usually only happens with scholarships that cover room and board.

When you receive the 1098-T and what to do with it

Schools must send the 1098-T by January 31 of the year after the expenses were paid. If you paid tuition in December 2024, you will receive the 1098-T in January 2025, and you will use it on your 2024 tax return. The form comes in the mail or, increasingly, through the school's online student portal.

You do not send the 1098-T to the IRS with your tax return. The school sends a copy directly to the IRS. You keep your copy and use the numbers from it to fill out the education credit worksheet or form that comes with your tax software or tax return instructions. If you use tax software, you enter the numbers from the 1098-T into the education section, and the software calculates your credit.

If you file your return before the 1098-T arrives, you can file using an estimate of the expenses and then file an amended return once you have the form. However, most people wait for the 1098-T to arrive before filing.

Expenses the 1098-T does and does not include

The 1098-T covers tuition and required fees only. may have access to expenses include tuition, course fees, lab fees, and required books and equipment that the school charges directly to your student account. They do not include room and board, transportation, personal expenses, or insurance. Books and supplies count only if the school requires them and charges them as part of your bill.

If you buy books at the bookstore separately from your tuition bill, those expenses do not appear on the 1098-T. You may still be able to claim them under certain circumstances, but you would need to track and report them yourself — the form will not show them. The same is true for computers or equipment you buy on your own, even if the school requires them for the program.

Expenses for a student who was not enrolled at least half-time in a degree or certificate program do not count. The school determines enrollment status and will not issue a 1098-T if the student was below half-time for the entire year.

What to do if the 1098-T has an error or you do not receive one

If the 1098-T shows the wrong student name, Social Security number, or expense amounts, contact the school's financial aid or registrar office when ready. They can issue a corrected form, usually within a few weeks. If you file your return before the correction arrives, you can file an amended return once you have the correct form.

If you paid may have access to education expenses but did not receive a 1098-T by early February, contact the school. They may not have issued one because expenses fell below $1, because the student was not enrolled at least half-time, or because of an administrative error. The school can tell you which situation applies and whether a form will be issued.

If you paid expenses out of pocket — for example, you paid tuition directly to the school rather than through a financial aid package — those expenses should still appear on the 1098-T. If they do not, ask the school to verify that your payment was recorded in the system.

How the 1098-T connects to the American Opportunity and Lifetime Learning Credits

The 1098-T provides the foundation for two different education tax credits. The American Opportunity Tax Credit allows up to $2,500 per student per year for the first four years of undergraduate study. The Lifetime Learning Credit allows up to $2,000 per tax return per year for any level of education, including graduate school and non-degree courses.

You cannot claim both credits for the same student in the same year. You choose the one that gives you the larger benefit. The 1098-T numbers are the same either way — you use Box 1 minus Box 5 to find your may have access to expenses — but the credit calculation differs. The American Opportunity Credit is worth more for most undergraduate students, while the Lifetime Learning Credit may be better if the student is in graduate school or taking courses that do not lead to a degree.

The credits also have income limits. If your modified adjusted gross income is above a certain threshold, you cannot claim either credit. The 1098-T does not tell you whether you meet the income test — you have to check the IRS instructions for the year you are filing.

Frequently Asked Questions

Does receiving a 1098-T mean I automatically get a tax credit?

No. The 1098-T reports your expenses to the IRS, but you must claim the credit yourself on your tax return. You use the numbers from the form to calculate whether you are may be able to access and how much the credit is worth. If your income is too high or if you have no tax liability, you may not be able to use the credit even though you received the form.

What if my child received a full scholarship and the 1098-T shows zero in Box 1?

If a scholarship covered all may have access to expenses, Box 1 will be zero or very small, and Box 5 will show the scholarship amount. You cannot claim a tax credit because you had no out-of-pocket expenses. The scholarship paid for the education, so there is nothing left for you to claim a credit on.

Can I claim education expenses that do not appear on the 1098-T?

Some expenses — like books you buy separately or a computer you purchase on your own — may not appear on the 1098-T even if they were required for the program. You can claim these under the American Opportunity Credit only, and only if you have other may have access to expenses from the 1098-T. You must track and report these expenses yourself; the form will not include them.

What happens if I claim a credit and then the school corrects the 1098-T?

If the school issues a corrected 1098-T after you file, you will need to file an amended return using the correct numbers. The IRS will compare your return to the 1098-T they received from the school, so the numbers must match. Filing the amended return corrects the discrepancy and ensures you claim the right amount.

Can I use the 1098-T for a student who was not a dependent on my tax return?

Yes. You can claim an education credit for a student you paid expenses for, even if they are not your dependent. The student must be enrolled at least half-time in a degree or certificate program, and you must have paid the may have access to expenses. The 1098-T will show the student's name and Social Security number; make sure it matches the person whose expenses you paid.