Education Tax Credits

 

Education Tax Credits (American Opportunity and Lifetime Learning Credits)

ETSU sends 1098T information to students each year. The IRS requires ETSU to report either the Box 1 or Box 2 amount. The Box 2 amount will be reported to ETSU students. The Box 2 amount will include all qualified tuition and related fees with a transaction date during the tax year.

The IRS allows a tax credit to be claimed for out-of-pocket payments made to ETSU during the year for tuition and certain fees. The IRS requires that we provide the 1098-T statement to you to use in completing IRS Form 8863. A detailed listing of qualified charges, payments, grants and scholarships is available at our GoldLink website. We recommend that you refer to that information to assist you in determining the amount of credit which may be claimed. 

This information may not be construed as tax advice. The amounts and calculations used to determine the credit are the decision of the taxpayer after consideration of relevant IRS regulations, IRS Publication 970, IRS Form 8863, and the advice of the tax consultant.

Box 1 -

Payments received for qualified tuition and related expenses

Box 2 -

Amount billed for qualified tuition and related expenses

Box 3 -

Checkbox for Change of Reporting Method

Box 4 -

Adjustments Made for Prior Year

Box 5 -

Scholarships or Grants

Box 6 -

Adjustments to Scholarships or Grants for a Prior Year

Box 7 -

Checkbox for Amounts for an Academic Period Beginning in January through March of 2011

Box 8 -

At least half-time student

Box 9 -

Graduate student

Box 10 -

Insurance Contract Reimbursements or Refunds



American Opportunity and Lifetime Learning Credits Questions & Answers

Question: Why did ETSU send a '1098' statement to me?
Answer: ETSU sent a 1098T form to students with qualified tuition fees in excess of scholarships and grants. You may also receive a 1098E statement. The 1098T is used to report qualified tuition and related expenses that may be eligible for Education Credits. The 1098E reflects interest paid on your student loan during the tax year. You may be able to deduct student loan interest on your income tax return if the interest payments were made during the first 60 months of the loan repayment.



Question:
Does that mean I am eligible to claim the amount in Box 2 as a tax credit?
Answer: Not necessarily. There are exclusions. Consult your tax accountant on computing and claiming the credit.



Question:
Who can claim the credits?
Answer: It depends upon your dependency status. Consult your tax advisor.



Question:
What is the qualified tuition and related expenses amount in Box 2?
Answer: It is the total of Maintenance Fees, Out-of-State Tuition, and Program Service Fee and other required fees billed during the calendar year.



Question:
What is the qualified grants and scholarships amount?
Answer: It is the total Grants and Scholarships that were applied to your account during the calendar year. Amounts for these items generally offset and reduce the amount of qualified tuition and fees eligible for tax credit. In general, scholarships and grants are nontaxable to the extent that they are used to pay tuition and fees. When nontaxable, they offset the amount of tuition and fees eligible for tax credit.


Question:
Can I claim other fees paid (housing rent, meal plan, books and supplies) for the tax credit.
Answer: Amounts for these items generally do not qualify for tax credits.



Question:
Should I mail my copy of 1098 to the IRS?
Answer: You should consult your tax advisor or Pub. 970, Tax Benefit for Higher Education for more information on documenting the tax credit.



Question:
Whom should I call if I have further questions regarding these educational benefits for taxpayers?
Answer: ETSU is providing this information to help you determine if you may be eligible for these educational benefits for taxpayers. However, ETSU may not provide tax advice or make a determination regarding your eligibility to claim these benefits. Contact the
IRS , call 1-800-829-1040, or your tax advisor for questions regarding eligibility to claim these credits.



Note:
The above information was developed to assist taxpayers with understanding the Hope and Lifetime Learning tax credits. It is not an IRS document, nor does it represent tax advice from East Tennessee State University. For more information refer to IRS Pub. 970, Tax Benefits for Higher Education or consult your tax consultant.