To determine if this scholarship or grant exceeded your tuition, consult your tax advisor. You may still qualify for a credit if you received enough scholarship money during the year to pay for your schooling. However, the IRS does not require you to file this form if your scholarship exceeds your tuition. This information may be valuable for calculating your tax liability. Qualified tuition and related expenses (QTREs)ĭepending on your college, you might receive a 1098-T statement as a scholarship or grant that exceeds your tuition. So, if you’re getting scholarship or fellowship money, be sure to check the box indicating that it’s not taxable. For this reason, you must keep track of Form 1098-T when submitting your income tax returns. As long as the amount is above $32,000, it’s considered earned income. In general, scholarships are tax-free when applied toward the cost of tuition and required fees. In addition, you may be able to claim a deduction on the taxable portion of your scholarship if you have no deductible expenses for tuition. Still, it will help you understand whether you qualify for a tax credit for education expenses. The 1098-T form does not report your taxable income. If so, you should consult your tax advisor. If you receive a scholarship that is greater than the cost of tuition, you may have to report the amount as taxable income. Therefore, the Box 1 amount on the 1098-T for Spring 2021 may be zero instead of populated with the actual payment. While the amount reported in Box 1 might be higher than the actual payment, it’s important to remember that the academic year starts in September and ends in December. If the scholarship exceeds the tuition, it should show on Box 1 of Form 1098-T. In addition, a CPA may be able to answer questions about Form 1098-T. Frequently asked questions about Form 1098-T should be directed to the Student Accounts Website or Tax Information section. The form contains data elements the IRS uses to determine whether they are eligible for the American opportunity credit and the lifetime learning credit. Students must file Form 1098-T with the IRS to claim education tax credits.
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