Article: 50098
What Is Form 1098-T?
Form 1098-T is issued by eligible educational institutions for each enrolled student where a reportable financial transaction has occurred. Insurers also use this form to report reimbursements or refunds of qualified tuition and related expenses.
You will use the details from this form to determine your eligibility for education-related tax benefits, including the American Opportunity Credit and Lifetime Learning Credit.
How to Add Form 1098-T
To add Form 1098-T to your return:
- Go to the Federal taxes section.
- Click on the Review tab on the left-hand side.
- Select I’d like to see the forms I’ve filled out or search for a form.
- In the search box, enter Education.
- Click +Add next to the Education form.
- Fill in the applicable information.
- Click Save to apply changes.
Reporting Multiple 1098-Ts from Different Institutions
If you’ve received multiple 1098-T forms from different schools:
- Enter the total amounts on the initial screen of the Education form.
- Scroll to the section labeled Additional Institutions.
- Enter details for each additional school on this screen.
Education Screen vs. Form 1098-T
The Education screen on 1040.com does not follow the exact line-numbering of IRS Form 1098-T. This is by design to account for the variety in individual tax situations.
Key Differences:
- The form is more flexible to accommodate:
- Additional qualified education expenses
- Expenses not listed on the 1098-T
Use your 1098-T as a guide, but evaluate your entire tax situation when entering data.
Reporting Taxable Scholarships or Grants
If you received a taxable scholarship or fellowship not reported on a W-2 or 1099:
- Use the same search steps listed above.
- Add the Other Miscellaneous Income screen.
- Scroll to find the box labeled Taxable scholarships not reported on W-2.
- Enter the income amount there.
Box 1 and Box 5
For help with determining whether Box 1 reports required educational expenses (related to Form 8863), use the IRS Interactive Tax Assistant (ITA). The ITA is a database maintained by the IRS, where you can search the official IRS position on everything from selling a home to claiming a dependent. Visit https://www.irs.gov/help/ita for additional help.
If the amount on Form 1098-T, box 5 (your scholarships) is greater than the amount in box 1 (or box 2, whichever is filled in on your 1098-T), then you cannot use any expenses to reduce your tax bill. If the amount in Box 5 is less than the amount in box 1 (or box 2, whichever is filled in on your 1098-T), then you can use the expenses as a deduction or credit. Subtract the amount in box 5 from box 1 (or box 2). The difference is generally the amount that was paid out of pocket, which can be reported on your return. For more information about education tax benefits, see IRS Publication 970.
If you receive a Form 1098-T with a box 5 stipend as a scholarship or fellowship, report it using Form 1098-T. See IRS IRS Tax Topic 421 for more information.
Additional Resources
For more details, consult these IRS resources: