The 1098-T reports may have access to education expenses so you can claim tax credits for tuition and related costs

The Form 1098-T is a tax document that colleges and universities send to you and the IRS to report money you paid for may have access to education expenses during the tax year. It exists so the IRS can verify that you actually spent the money you're claiming on your tax return when you take an education tax credit — either the American Opportunity Credit or the Lifetime Learning Credit.

You don't send the 1098-T with your return. Instead, you use the numbers on it to fill in your tax form (usually Form 8863, Education Credits) when you file. The school sends it to you by January 31 following the tax year in which the expenses occurred.

The form reports only what the school received from you or on your behalf. It does not report loans, scholarships that covered the expenses, or money you paid out of pocket for books and supplies — even though some of those costs may count toward the credit. This gap between what the 1098-T shows and what you can actually claim is why you need to read the form carefully and sometimes do your own math.

Key Takeaways

  • The 1098-T shows tuition, fees, and student activity fees paid to the school, but not books, supplies, or room and board.
  • Scholarships and grants appear in Box 5; if they paid for may have access to expenses, you must subtract them from your credit calculation.
  • The form reports what the school received, not what you paid out of pocket, so you may have more may have access to expenses than the 1098-T shows.
  • You use the 1098-T numbers to complete Form 8863 when you claim the American Opportunity or Lifetime Learning Credit on your tax return.

What expenses appear on the 1098-T

Box 1 shows may have access to tuition and educational fees paid by you or someone else on your behalf during the tax year. This includes tuition, mandatory fees (such as technology or lab fees), and student activity fees — but only if the school required them as a condition of enrollment. It does not include room and board, transportation, or personal expenses.

Box 2 shows scholarships or grants the school paid out during the year. This number matters because if a scholarship paid for may have access to tuition and fees, you must reduce your credit by that amount. The IRS does not allow you to claim a credit for expenses that were already paid by someone else's money.

Boxes 3 and 4 are less common. Box 3 shows adjustments the school made (usually corrections from a prior year). Box 4 shows graduate-level expenses, which may have access to only for the Lifetime Learning Credit, not the American Opportunity Credit.

What the 1098-T does not include

Books, supplies, and equipment are may have access to expenses for the American Opportunity Credit, but the school does not report them on the 1098-T. You must track these costs yourself and add them to the tuition amount from Box 1 when you calculate your credit. Keep receipts or invoices showing what you spent.

Room and board, transportation, insurance, and loan fees do not count as may have access to expenses, even if you paid them to the school. Neither do computers or internet service, unless the school required you to buy a specific model as part of your enrollment agreement.

If you paid tuition out of pocket but the school received payment from a third party (such as a parent or employer), the 1098-T will show the third-party payment, not yours. You can still claim the credit, but you'll need to document your own payment separately.

How scholarships and grants affect your credit

If Box 2 shows a scholarship or grant, you must subtract it from the may have access to expenses before you calculate your credit. The rule is strict: you cannot claim a credit for expenses that were paid with tax-information programs.

For example, if Box 1 shows $5,000 in tuition and Box 2 shows a $2,000 scholarship, your may have access to expenses for credit purposes are $3,000. The American Opportunity Credit is worth up to $2,500 per student per year, so you would calculate it on the $3,000 base.

If a scholarship paid for books or supplies instead of tuition, the school may not report it in Box 2. In that case, you still must subtract it from your total may have access to expenses — you just have to track it yourself. This is one reason to keep all scholarship letters and payment records.

When you receive a 1098-T and when you don't

Schools must send a 1098-T to any student (or parent) who paid may have access to expenses during the year, with limited exceptions. If you paid tuition but received no 1098-T by early February, contact the school's financial aid or bursar office. They may have the wrong address on file, or they may not have processed your payment yet.

Some students don't receive a 1098-T because the school was not required to send one. Schools do not issue a 1098-T if you paid less than $600 in may have access to expenses during the year, though you can still claim a credit if you had more expenses than the form shows. Graduate students and students at non-degree-granting institutions may also not receive one.

If you paid tuition but the school has no record of it, ask for a receipt or payment confirmation. You can claim the credit based on your own records even without a 1098-T, but you should be prepared to show documentation if the IRS asks.

How to use the 1098-T on your tax return

You report the information from your 1098-T on Form 8863, Education Credits. This form walks you through calculating either the American Opportunity Credit (up to $2,500 per student) or the Lifetime Learning Credit (up to $2,000 per household), depending on which one gives you a larger benefit.

Start with the may have access to expenses from Box 1 of the 1098-T. Add any books, supplies, or equipment you paid for yourself. Subtract any scholarships or grants that paid for those expenses (Box 2, plus any you tracked separately). The result is your total may have access to expenses for the year.

Then follow the Form 8863 instructions to calculate your credit. The American Opportunity Credit is worth 100% of the first $2,000 of expenses and 25% of the next $2,000, for a maximum of $2,500 per student per year. The Lifetime Learning Credit is worth 20% of up to $10,000 in expenses, for a maximum of $2,000 per household per year. You choose whichever credit is larger.

Correcting errors on your 1098-T

If the 1098-T shows the wrong amount or is missing information, contact the school when ready. Ask them to issue a corrected form (marked as a correction) and send it to you and the IRS. This usually happens within 30 days, though it can take longer if the school's records need investigation.

If you file your return before receiving a corrected 1098-T, you can file an amended return (Form 1040-X) once you have the correct information. Keep the corrected 1098-T with your records. If the school never corrects the error, you can still file based on your own documentation, but you should note the discrepancy on your return or be ready to explain it if audited.

Do not ignore a 1098-T you believe is wrong. If the IRS matches your return against the 1098-T data and finds a mismatch, they will send you a notice. It is easier to correct the problem before filing than to respond to an IRS letter later.

Frequently Asked Questions

Can I claim a tax credit if I didn't receive a 1098-T?

Yes. You can claim a credit based on your own records of tuition and may have access to expenses, even if the school didn't send a 1098-T. You may not have received one because expenses were under $600, or the school may have made an error. Keep receipts and be ready to document your expenses if the IRS asks.

What if my parents paid my tuition — whose name goes on the 1098-T?

The school sends the 1098-T to whoever paid the bill or is listed as the account holder. If your parents paid, they receive it. If you paid, you receive it. Only the person who received the 1098-T can use it to claim the credit, though the credit can benefit either the student or the parent depending on who claims it on their return.

Do I have to claim a tax credit if I receive a 1098-T?

No. Receiving a 1098-T does not require you to claim a credit. You claim a credit only if it benefits you — if your income is too high or if you have no tax liability, the credit may not help. You can also choose not to claim it in one year and claim it in a later year if that works better for your situation.

Can I use the same expenses to claim both a 1098-T credit and a student loan interest deduction?

No. You cannot claim a credit and a deduction for the same expenses. If you use tuition to calculate an education credit, you cannot also deduct student loan interest paid on loans that funded those same expenses. You must choose the option that gives you the larger tax benefit.

What happens if a scholarship paid for tuition but the school didn't report it in Box 2?

You must still subtract it from your may have access to expenses when you calculate your credit. The school's failure to report it does not change the rule. Keep the scholarship letter and any payment records showing the scholarship covered tuition, and subtract that amount from Box 1 before you calculate your credit on Form 8863.