Cost & Financial Aid

Education Tax Credits & 1098-T

Education Tax Credits and 1098-T

Education Tax Credits

American Opportunity and the Lifetime Learning Credit

Education tax credits can help offset the costs of education. The American Opportunity and the Lifetime Learning Credit are education credits you can subtract in full from the federal income tax, not just deduct from taxable income. These incentives come in a couple of forms: tax credits, which directly reduce the amount of tax you are liable for, and tax deductions, which reduce the amount of income on which you pay taxes.

Helpful information can be found at the following websites:

IRS—Education Credits

IRS—Tax Benefits for Education: Information Center

IRS—Am I Eligible to Claim an Education Credit?

1098-T Form Overview

The 1098-T is a federal tax form that details what was paid or billed to the school for the calendar year. It is used to help determine whether you are eligible for certain US federal tax deductions and/or tax credits for your educational expenses.

1098-T forms are mailed to eligible students by January 31 each year and may also be accessed electronically in Transact. Please note: not all students are eligible to receive a 1098-T. You may set up Payer access to Transact. Further information on setting up a Payer is located at Manage Your Student Account.

  • If the total grants and scholarships for the calendar year are more than the total of tuition and applicable fees then you may not be eligible for a 1098-T form.
  • International Students are not eligible for a 1098-T form.
  • In accordance with federal regulations, institutions are required to report Payments Received from Qualified Tuition and Related Expenses in Box 1.
  • Box 1. Payments Received for Qualified Tuition and Related Expenses
  • Enter the total amount of payments received for qualified tuition and related expenses from all sources during the calendar year. The amount reported is the total amount of payments received less any reimbursements or refunds made during the calendar year that relate to the payments received for qualified tuition and related expenses during the same calendar year. The amount reported is not reduced by scholarships and grants reported in box 5. Include in this box the receipt of a payment of past-due qualified tuition or related expenses from a previous calendar year, but only if the educational institution previously billed the student for such amount(s).
  • Box 2. Reserved

Please consult your tax accountant for assistance with the 1098-T form and your education tax credit eligibility. You may wish to request a tuition and fees statement from SAIC for the tax year by calling 312.899.7443 or the Student Financial Services office at 312.629.6600.

International Students

International students are generally not entitled to a 1098-T form because they are usually considered nonresident aliens ineligible for education tax credits. SAIC does not automatically issue or provide 1098-T to International Students because most F-1 or J-1 students file Form 1040NR, making the 1098-T irrelevant for their taxes. For detail, click here.

Key details regarding 1098-T for international students:

  • Nonresident Aliens: If you are in the U.S. for less than 5 years on an F or J visa, you are considerd a nonresident and generally cannot claim the education credits reported on a 1098-T. 
  • Requesting the Form: If you are eligiblie, you must have a SSN on file with SAIC to receive one. You can request a copy of a 1098-T from the Student Accounts staff in the Student Financial Services office by emailing saic.sfs@saic.edu.
  • Exceptions: If you have been in the U.S. for more than 5 years and pass the "substantial presence test", you may be treated as a resident alien for tax purposes and could be eligible.

If you are a non-resident, you generally do not need to use the 1098-T when filling your taxes.

 

Eligibility for Education Tax Credits

The primary purpose of the Form 1098-T is to help determine eligibility for U.S. education tax credits, such as the American Opportunity Tax Credit (AOTC) or the Lifetime Learning Credit (LLC).

  • Nonresident Aliens: In most cases, international students are considered nonresident aliens for tax purposes (espeically during the first five years int he U.S. on an F-1 visa) and are not eligible to claim these education tax credits. Therefore, they typically do not need the form for this purpose.
  • Resident Aliens: An international student may be eligible to claim education credits if they are considered a resident alien for tax purposes. This status is determined by meeting either the "green card test" or the "substantial presence test".

  • Other Tax Situations: Even if not eligible for education credits, the information on the 1098-T might be necessary if you received a taxable schoalrship or grant that needs to be reported as income. This income might instead be reported on a Form 1042-S, which your school will issue by March 17.