The 1098-T is a form that reports education costs you paid during the year

The 1098-T is a tax form that colleges and universities send to you and the IRS to report how much you paid for may have access to education expenses in a given tax year. It covers tuition, fees, and related costs for you, your spouse, or your dependent. You use the information on this form to claim education tax credits on your federal return — specifically the American Opportunity Credit or the Lifetime Learning Credit.

The form arrives by mail or email from your school, usually by January 31st of the year after you paid the expenses. You do not request it; the school sends it automatically if you paid may have access to costs. The form shows what the school received from you directly, what financial aid covered, and what scholarships paid for, because only your own out-of-pocket costs count toward the credits.

You need this form to claim education credits, but the form itself does not determine whether you may have access to for the credits. The IRS uses the information to verify your expenses when you file your return. If you paid education costs but did not receive a 1098-T, you can still claim the credits — you will just need to document the expenses yourself with receipts, tuition bills, or statements from the school.

Key Takeaways

  • The 1098-T reports may have access to education expenses paid during the tax year and is sent by the school to both you and the IRS by January 31st.
  • Only your own out-of-pocket costs count; amounts paid by scholarships, grants, or financial aid are excluded from the credit calculation.
  • You use the form to claim either the American Opportunity Credit (up to $2,500 per student per year) or the Lifetime Learning Credit (up to $2,000 per return per year), but not both in the same year.
  • The form shows expenses in boxes, and you report the relevant box amount on your tax return when you claim the credit.

What boxes on the 1098-T mean and which ones you use

The 1098-T has several boxes, and each one reports a different type of expense or payment. Box 1 shows may have access to tuition and fees you paid. Box 2 shows scholarships or grants the school paid out on your behalf. Box 5 shows may have access to student loan interest you paid during the year — this is separate from the education credits and goes on a different line of your return.

When you claim an education credit, you subtract the amount in Box 2 (scholarships and grants) from the amount in Box 1 (your tuition and fees). The result is your net out-of-pocket cost, and that is the number you use to calculate your credit. If Box 2 is larger than Box 1, your net cost is zero, and you cannot claim a credit that year — the school covered everything.

Box 5 is not part of the education credits. If you paid student loan interest during the year, that amount appears in Box 5, and you report it separately on your return to claim the Student Loan Interest Deduction, which is different from the education credits and has its own income limits and rules.

American Opportunity Credit versus Lifetime Learning Credit

You can claim one of two education credits, but not both in the same year for the same student. The American Opportunity Credit is worth up to $2,500 per student per year and covers the first four years of undergraduate study. It requires the student to be enrolled at least half-time in a degree program. You can claim it for up to four tax years per student.

The Lifetime Learning Credit is worth up to $2,000 per return per year (not per student) and covers any level of education — undergraduate, graduate, or professional development courses. You do not have to be enrolled full-time or pursuing a degree. You can claim it for an unlimited number of years, but only one credit per return per year across all students in your household.

The American Opportunity Credit is usually the better choice if the student qualifies, because it is worth more money and you can claim it for four years. The Lifetime Learning Credit works if the student is in graduate school, taking professional courses, or attending part-time. Your income also affects which credit you can claim; both have income phase-out ranges, and if your income is too high, you may not may have access to for either.

Who receives a 1098-T and when it arrives

Your school sends a 1098-T if you paid may have access to education expenses during the tax year. may have access to expenses include tuition, fees required to attend, and course materials (books, supplies, equipment) if the school requires you to buy them from the school itself. Room and board, transportation, and personal expenses do not count, even if you paid them while in school.

The form arrives by January 31st following the tax year in which you paid the expenses. If you paid in December 2024, you will receive the 1098-T by January 31, 2025, and you use it on your 2024 tax return. If your school does not send the form by early February, contact the registrar or financial aid office to request it.

You will receive a copy for your records and a copy goes to the IRS. Keep your copy with your tax documents. If the form contains an error — for example, the school listed the wrong amount or included expenses that should not be there — contact the school to request a corrected form, which will be marked as a correction and sent to both you and the IRS.

How to report the 1098-T on your tax return

When you file your federal return, you report the education credit on Form 8863 (Education Credits), which is a worksheet that calculates your credit based on the expenses you report. You enter the amount from Box 1 of your 1098-T, subtract any scholarships or grants from Box 2, and then follow the form's instructions to calculate your credit amount.

The credit amount depends on your income. Both the American Opportunity and Lifetime Learning Credits have income limits, and if your income exceeds the upper limit, you cannot claim the credit. The income ranges change each year, so check the current year's Form 8863 instructions to see whether you may have access to.

If you use tax software, the software will ask you for the information from your 1098-T and calculate the credit for you. If you file by hand or with a tax professional, provide them with your 1098-T and they will complete Form 8863 as part of your return. The credit reduces the amount of tax you owe or increases your refund.

What to do if you paid education costs but did not receive a 1098-T

If you paid may have access to education expenses but your school did not send a 1098-T, you can still claim the education credit. You will need to document your expenses with receipts, tuition bills, or a statement from the school showing what you paid. Contact the school's financial aid or registrar office and ask for a written statement of your may have access to education expenses for the tax year.

When you file your return, enter the amount you paid (not the amount the school reported) on Form 8863. The IRS may ask for documentation later, so keep all receipts and bills. If the school eventually sends a 1098-T that shows a different amount, you will need to file an amended return to match the school's official record.

Some schools do not send a 1098-T if the student received a full scholarship or if the school is not required to report (for example, some international schools or non-degree programs). In these cases, gather your own documentation and report what you actually paid out of pocket.

Income limits and phase-outs for education credits

Both education credits have income limits, and if your income is too high, you cannot claim the credit. The limits change each year and depend on your filing status (single, married filing jointly, head of household, etc.). For 2024, the American Opportunity Credit begins to phase out at $80,000 for single filers and $160,000 for married filing jointly; the Lifetime Learning Credit phases out at $70,000 for single filers and $140,000 for married filing jointly.

If your income falls within the phase-out range, your credit is reduced. If your income exceeds the upper limit, you cannot claim the credit at all. Check the Form 8863 instructions for the tax year you are filing to see the exact limits and whether you may have access to.

Some taxpayers use strategies like claiming a dependent as a separate filer or splitting income between spouses to stay under the limit, but these situations are complex and depend on your specific circumstances. If you are near the income limit, speak with a tax professional to understand how it affects your credit.

Frequently Asked Questions

Can I claim an education credit if I paid expenses with student loans?

Yes. The credit is based on what you paid out of pocket, whether that money came from savings, loans, or other sources. The fact that you borrowed the money does not change whether the expenses count. However, if you paid student loan interest during the year, that interest is reported separately on your return and is not part of the education credit calculation.

What if my child received a scholarship that covered all tuition?

If a scholarship covered all your may have access to expenses, your net out-of-pocket cost is zero, and you cannot claim an education credit that year. The credit is based only on what you paid yourself. If the scholarship covered tuition but you paid for books or fees, you can claim a credit on those amounts.

Can I claim the education credit for my adult child if they live with me?

Only if you claim them as a dependent on your return. If your adult child files their own return and claims themselves, they must claim the education credit on their own return, not yours. If you claim them as a dependent, you claim the credit. You cannot both claim the credit for the same student in the same year.

Do I need the 1098-T to file my return?

You do not need the physical form to file, but you need the information on it. If the school did not send a 1098-T, you can gather your own documentation of what you paid and report that amount on Form 8863. The IRS may request proof later, so keep receipts and bills.

What happens if the 1098-T shows the wrong amount?

Contact your school and ask them to issue a corrected form. A corrected 1098-T will be marked as a correction and sent to both you and the IRS. Once you receive the corrected form, use the corrected amounts on your return. If you already filed using the incorrect amount, you will need to file an amended return.