The 1098-T reports education expenses you paid, so you can claim a tax credit for them

The Form 1098-T is a document your school sends to you and the IRS showing how much you paid in may have access to education expenses during the tax year. It exists so you can claim either the American Opportunity Tax Credit or the Lifetime Learning Credit on your tax return — both of which reduce your tax bill dollar-for-dollar, not just your taxable income.

You do not need a 1098-T to claim these credits, but the form makes it easier to document what you spent. Schools are required to send it to students (or their parents, if the parent is claiming the credit) by January 31 of the year after the expenses were paid.

The form shows four key boxes: the may have access to tuition and fees you paid (Box 1), scholarships or grants the school gave you (Box 5), adjustments the school made (Box 2), and whether you are a graduate or professional student (Box 7). The credits themselves are calculated on your tax return, not on the form.

Key Takeaways

  • Schools send the 1098-T to report may have access to education expenses, which you use to claim a tax credit that reduces your tax bill directly.
  • The form shows tuition and fees paid, scholarships received, and adjustments — but you calculate the actual credit amount on your tax return.
  • You can claim a credit even without a 1098-T if you have receipts and records of what you paid.
  • The American Opportunity Credit (up to $2,500 per student per year) and Lifetime Learning Credit (up to $2,000 per return per year) are mutually exclusive — you choose one per student.
  • If your school did not send you a 1098-T, contact the financial aid or registrar's office to request it or get a transcript of charges.

What boxes on the 1098-T mean and what they are used for

Box 1 shows may have access to tuition and fees the student paid. This includes tuition, fees required to attend, and course materials — but not room, board, or books you bought separately. If you paid part and a scholarship paid part, Box 1 shows only what you paid out of pocket.

Box 5 shows scholarships, grants, or other aid the school gave you. This matters because scholarships reduce the amount of expenses you can use to calculate your credit. If Box 5 is larger than Box 1, you have no may have access to expenses left to claim a credit on.

Box 2 shows adjustments the school made — usually refunds you received after the form was prepared, or corrections to earlier figures. Read the instructions that come with your 1098-T to see what adjustments explore to you.

Box 7 is a checkbox showing whether you were a graduate or professional student during any part of the year. This affects which credit you can claim: graduate students cannot use the American Opportunity Credit, only the Lifetime Learning Credit.

American Opportunity Credit versus Lifetime Learning Credit

The American Opportunity Credit is worth up to $2,500 per student per tax year and is available only for the first four years of undergraduate study. It requires that the student be enrolled at least half-time in a degree program. Up to $500 of this credit is refundable, meaning you can get money back even if you owe no tax.

The Lifetime Learning Credit is worth up to $2,000 per tax return (not per student) and has no grade-level limit — you can claim it for graduate school, professional certifications, or skill-building courses. It does not require half-time enrollment. However, it is not refundable: it can only reduce your tax bill to zero, not below.

You cannot claim both credits for the same student in the same year. If you have multiple children in school, you can use the American Opportunity Credit for one and the Lifetime Learning Credit for another, but not both for the same person.

When you do not receive a 1098-T or the form is wrong

Schools are required to send the 1098-T by January 31, but some do not — especially if you paid through a payment plan, paid late in the year, or attended a school that does not issue the form. You can still claim the credit. Contact your school's financial aid office or registrar and ask for an itemized statement of charges and payments for the tax year.

If you received a 1098-T but believe it is wrong — for example, it shows a scholarship you did not receive, or omits expenses you paid — contact the school when ready. They can issue a corrected form (marked "CORRECTED" at the top) and send it to you and the IRS. Do not file your return until you have the corrected form.

If the school will not correct it or does not respond, file your return with the information you have and keep your own records: receipts, cancelled checks, credit card statements, and the school's billing statements. The IRS may ask for these if they question your credit claim.

Income limits and phase-out ranges

Both the American Opportunity Credit and the Lifetime Learning Credit begin to phase out at higher income levels. The phase-out range depends on your filing status and changes each year. For 2023, the American Opportunity Credit phases out between $80,000 and $90,000 for single filers and $160,000 to $180,000 for married filing jointly. The Lifetime Learning Credit phases out between $80,000 and $90,000 for single filers and $160,000 to $180,000 for married filing jointly.

If your income falls within the phase-out range, the credit is reduced proportionally. If your income exceeds the upper limit, you cannot claim the credit at all. These limits are adjusted annually for inflation, so check the IRS website or your tax software for the current year's ranges before you file.

How to report the 1098-T on your tax return

You do not transfer numbers directly from the 1098-T to your tax return. Instead, you use the information on the form to calculate your credit using either Form 8863 (Education Credits) or your tax software's education credit interview.

The software or form will ask you: the student's name and Social Security number, the amount of may have access to expenses you paid, the amount of scholarships received, your filing status, and your modified adjusted gross income. It will then calculate which credit you are may have access to to and how much it reduces your tax bill.

If you are claiming the credit for a dependent child, you enter the child's information, not your own. If the child has income and files their own return, only one of you can claim the credit — usually the parent, but the child can claim it if the parent does not.

Frequently Asked Questions

Can I claim a credit if my parents paid my tuition instead of me?

Yes, but only if your parents claim you as a dependent on their return. The person who claims the dependent is the one who can claim the education credit. If you are independent, you cannot claim the credit even if your parents paid — they can claim it instead, if they meet the other requirements.

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

You cannot claim a credit on expenses the scholarship paid for. The 1098-T will show the scholarship in Box 5, which reduces your may have access to expenses in Box 1. If the scholarship equals or exceeds your expenses, you have no remaining may have access to expenses to claim a credit on.

Do room and board count as may have access to expenses?

No. Room and board are not may have access to expenses for either credit. Only tuition, fees required to attend, and course materials (including textbooks) count. If your 1098-T includes room and board, you will need to subtract it before calculating your credit.

Can I claim a credit for a student loan I took out?

No. Student loan payments are not education expenses. The education credits are based on what you paid to the school for tuition and fees, not on debt repayment. However, you may be able to deduct student loan interest separately on your return.

What if I paid expenses in one year but did not attend school until the next year?

You claim the credit in the year the expenses were paid, not the year you attended. If you paid tuition in December 2023 for a spring 2024 semester, you claim the credit on your 2023 return. The 1098-T will be issued in early 2024 and will show the 2023 tax year.