1098-T and the Tax Payer Relief Act

Ah, tax season. Everyone’s favorite season second only to fall. Whether it’s your first time filing taxes or your 5th, it’s important to know what potential tax benefits you may be eligible for. Let’s start with a wee history lesson, shall we?

The Tax Payer Relief act of 1997 created two possible tax incentives for students and their families. The American Opportunity Credit and Lifetime Learning credit are tax credits that can be claimed for out-of-pocket tuition and fee expenses. Since Wentworth does not have any fees, in our case they can be used for tuition only.

The American Opportunity Credit is an up to $2,500 credit per student that can be claimed for only 4 years by either the student or family. Both undergraduate and graduate students are eligible but you must be enrolled in a degree program and be at least ½ time.

The Lifetime Learning Credit is a maximum of $2,000 credit that can be applied to both credit and noncredit courses. You also do not have to be enrolled at least ½ time to be eligible for this credit.

Quick important not here, you cannot combine both of the credits- only one can be used. You can learn more by checking out this great article from SALT Money! https://www.saltmoney.org/content/media/Article/your-college-education-may-come-with-tax-benefits/_/R-101-6591

To determine whether or not a student is eligible to claim these tax credits, Wentworth reports student enrollment data to both the IRS and student’s (via a 1098-T form).

We file 1098-T’s for any individual enrolled at Wentworth that has been billed for qualified tuition and related expenses during the calendar year (with a few exceptions, of course).

We do not file 1098-T’s for students who fulfill one (or more) of the following conditions

  • Entire qualified tuition and related expenses were waived or paid for with a scholarship or paid under a formal billing agreement where the institution only an employer or government entity
  • Nonresident aliens
  • International Students
  • Non matriculating students
  • Students enrolled in courses which no academic credit is offered

Now, it’s important to note that 1098-T’s do not HAVE to be used. They serve first and foremost as a verification of student’s enrollment during the calendar year. They will also list the amount of students qualified tuition and related expenses and the amounts received in scholarships and grants.

Wentworth reports enrollment, charges, and scholarship information on a calendar year basis. That means whatever tuition charges were applied during a calendar year will be reflected. Same goes for scholarship and grant funding that disbursed during the calendar year. We do not report payments made by students/ families.

For student’s that do a Co-Op term there are no tuition charges for the given term so while you are still registered the total tuition charges for the calendar year may be less than the scholarship and grant aid that disbursed. It is important to note that this information is correct and as a reminder, the forms are not required to be used. Ultimately, the information will balance out in the next academic year.

We do mail 1098-T forms out to student’s however they can also be accessed online at: https://tra.vangent.com/traPortal/app/login?execution=e2s1.

One final note, while we do generate the tax forms the staff of the Student Service Center are not considered tax experts. Should you have questions regarding your form and how to utilize it, we recommend contacting a tax expert!

To get some more information check out some information videos from FATV! https://wit.financialaidtv.com/play/1805-education-tax-benefits-and-credits/336-can-i-deduct-my-tuition-my-federal-taxes

Until next time!

Mady

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