Do You Get a 1098-T If You Have Financial Aid?

Yes, you generally do get a 1098-T if you have financial aid. Federal law requires eligible colleges, universities, and vocational schools to issue the form whenever they process a payment toward qualified tuition and related expenses, and scholarship, grant, and student loan disbursements all count as payments from a reportable source.¹ Having aid does not remove you from the reporting system. In most cases it makes the form more useful, because the 1098-T is where you compare what your aid paid for against what counts as a qualified expense, which is what tells you whether you owe tax on part of a scholarship or can claim an education credit.

Why Financial Aid Does Not Change the Reporting

A “reportable transaction” is any payment the school receives toward qualified tuition and related expenses, from any source. That includes money you pay from your own account, a parent’s check, student loan proceeds, and scholarship or grant disbursements the school applies to your bill.¹

Say your school bills $15,000 in tuition, a $10,000 scholarship covers part of it, and student loans cover the remaining $5,000. The school reports the full $15,000 in payments received, and the scholarship shows up separately on the form. The aid never made the transaction unreportable; it just changed who paid.

How Your Aid Shows Up on the Form

The two boxes that matter most when you have aid are Box 1 and Box 5. Box 1 shows the total payments the school received during the calendar year for qualified tuition and related expenses, from every source combined. Box 5 shows the total scholarships or grants the school administered and processed on your behalf during the same period.²

Subtracting Box 5 from Box 1 gives you a rough measure of your net qualified expenses. That’s the starting point for any education credit calculation. If Box 5 is larger than Box 1, the excess may be taxable, which is covered below.

Only qualified expenses appear in Box 1. Qualified expenses include tuition, mandatory enrollment fees, and course materials required for attendance.³ The following are excluded:

Room and board, including on-campus housing and meal plans
Insurance, including student health fees
Transportation, such as parking passes and commuting costs
Personal living expenses that the school does not require for enrollment

The distinction matters twice over. Aid that pays for room and board doesn’t reduce the qualified expenses in Box 1, but those same non-qualified costs can’t support a tax credit either.

A Few Other Boxes Worth a Look

Box 4 reports an adjustment to a prior year’s qualified expenses, for instance a tuition refund this year for a class you dropped last year, and an amount there can require you to repay part of a credit you claimed before.² Box 7 flags that some of the Box 1 amount covers an academic period starting in January through March of the following year. Box 8 is checked if you were enrolled at least half-time during any academic period that began in the tax year, which matters for the American Opportunity Tax Credit. Box 9 is checked for graduate students.⁴

When Part of Your Scholarship Is Taxable

A scholarship or grant is tax-free only to the extent it pays for qualified education expenses like tuition, required fees, and required course materials.⁵ If your total scholarships exceed qualified expenses, or any part of the scholarship is designated for room, board, or another non-qualified cost, that excess is taxable income.

On the 1098-T, this shows up when Box 5 is bigger than Box 1. If Box 1 is $12,000 and Box 5 is $14,000, the $2,000 difference is potentially taxable. Report taxable scholarship income on Form 1040. If it appeared in Box 1 of a W-2, common for teaching or research assistantships, put it on Line 1a. Otherwise it goes on Line 8 with Schedule 1 attached.⁶

Sometimes it works in your favor to voluntarily treat part of an otherwise tax-free scholarship as taxable. Doing so frees up more qualified expenses for an education credit, and the credit can outweigh the added tax. Publication 970 walks through the math, and it’s worth running both ways when your scholarship amount is close to your qualified expenses.⁵

For a dependent student, taxable scholarship income above $2,700 can be subject to the “kiddie tax,” which taxes a child’s unearned income at the parent’s marginal rate and may require Form 8615.⁷

Education Credits Your 1098-T Supports

The numbers on the form feed two federal education tax credits. You can claim one or the other for the same student in the same year, but not both. Both phase out for modified adjusted gross income between $80,000 and $90,000 single, or $160,000 and $180,000 joint.⁸

American Opportunity Tax Credit

The AOTC is worth up to $2,500 per eligible student per year and is available during the first four years of postsecondary education. The student must be enrolled at least half-time and pursuing a degree or recognized credential. Up to $1,000 of the credit is refundable, so it can generate a refund even when you owe no tax. A student with a felony drug conviction at the end of the tax year cannot claim the AOTC.⁹

Lifetime Learning Credit

The LLC equals 20 percent of the first $10,000 in qualified education expenses, for a maximum of $2,000 per return.¹⁰ There’s no cap on how many years you can claim it, no half-time requirement, and it covers graduate coursework. It is nonrefundable, so it can zero out your tax but not generate a refund on its own. The felony drug conviction restriction does not apply.

Either credit is claimed on Form 8863, and you’ll need your school’s EIN from the 1098-T to file it.¹¹

When You Will Not Receive a 1098-T

A few narrow situations let a school skip the form entirely:⁴

Courses that don’t count toward a degree, certificate, or other recognized credential, such as personal enrichment or noncredit continuing education
Nonresident alien students, unless the student requests the form
Qualified tuition entirely paid by scholarships or grants, leaving no out-of-pocket payments to report
Tuition entirely covered by a formal billing arrangement between the school and an employer or government agency, such as the Department of Veterans Affairs or Department of Defense, where the school doesn’t keep a separate financial account for the student

Falling into one of these categories doesn’t automatically cost you an education credit. If the school wasn’t required to issue a form, you can still claim a credit as long as you were enrolled at an eligible institution and can document your qualified expenses with tuition bills, receipts, and enrollment records.⁵

If the school was required to send the form and did not, request it after the January 31 furnishing deadline and cooperate with what they need to produce it. If they still don’t provide one, you can claim the credit on the strength of your own records.⁵

Getting the Form and Checking It

Schools must furnish the 1098-T to students by January 31 of the year after the tax year.¹ Most schools post it in a student portal or through a third-party billing site. If you didn’t opt into electronic delivery, a paper copy goes to the address on file.

Check your Social Security Number or ITIN on the form. An error there causes processing delays when you file, and if you never gave the school your tax ID at all, you can face a $50 IRS penalty absent reasonable cause.¹²

Compare Box 1 and Box 5 against your own records. Schools occasionally miss a scholarship disbursement or misallocate a payment, and the numbers matter for both the taxable-scholarship question and any credit you plan to claim. If something is off, contact the bursar or student accounts office and ask for a corrected 1098-T. Hold on to both the original and the corrected copy in case the IRS asks about your return later.

1
Office of the Law Revision Counsel. 26 USC 6050S – Returns Relating to Higher Education Tuition and Related Expenses
2
Internal Revenue Service. Form 1098-T 2025 Tuition Statement Instructions
3
Internal Revenue Service. Qualified Education Expenses
4
Internal Revenue Service. Instructions for Forms 1098-E and 1098-T (2025)
5
Internal Revenue Service. Publication 970 (2025), Tax Benefits for Education
6
Internal Revenue Service. Topic No. 421, Scholarships, Fellowship Grants, and Other Grants
7
Internal Revenue Service. Topic No. 553, Tax on a Child’s Investment and Other Unearned Income (Kiddie Tax)
8
Internal Revenue Service. Education Credits – AOTC and LLC
9
Internal Revenue Service. American Opportunity Tax Credit
10
Internal Revenue Service. Lifetime Learning Credit
11
Internal Revenue Service. Instructions for Form 8863 (2025)
12
Internal Revenue Service. Form W-9S Request for Student’s or Borrower’s Taxpayer Identification Number and Certification