What Is a 1098-T Form? Boxes, Credits, and Who Claims It

A 1098-T form is the tuition statement your college or vocational school sends every January to report what you paid in qualified tuition and related expenses the previous year. You use it to claim one of two federal education tax credits, worth up to $2,500 per student. Your school sends an identical copy to the IRS, so the figures on your return need to match the form or be backed by your own records.

Who Sends It and When

Any postsecondary school that participates in a federal student aid program is required to issue 1098-Ts.¹ That covers almost every accredited college, university, and for-profit trade school in the country. You should have the form by January 31, which gives you time before the April filing deadline.²

Two groups of students won’t get one: people taking courses for no academic credit, and students whose qualified expenses were entirely paid by scholarships or grants.³ Most schools post the form to the student portal before mailing a paper copy, so check there first if January 31 passes without one in your inbox.

Reading the Boxes

The form has several numbered boxes. A handful do the real work:

Box 1 is the total your school received during the calendar year for qualified tuition and related expenses. It covers out-of-pocket money, student loan proceeds, and payments from third parties like a grandparent. This is where the credit calculation starts.³
Box 4 reports any refund or reduction of tuition that was already counted in a prior tax year. If you claimed a credit on that money last year, you may owe some of it back.
Box 5 is the total of scholarships, fellowships, and grants your school processed. You subtract this from Box 1 to find your net cost.
Box 7 is checked when payments reported for this year apply to a term starting in January, February, or March of next year. You can still claim those expenses in the year you paid them.
Box 8 is checked if you were enrolled at least half-time for any academic period. Half-time enrollment is a requirement for the American Opportunity Tax Credit.
Box 9 is checked for graduate students, who can’t claim the American Opportunity credit but can claim the Lifetime Learning Credit.³

Your Real Qualified Expenses Aren’t Always on the Form

Box 1 minus Box 5 is a starting point, not a final answer. The 1098-T only reports money that moved through the school’s billing system, which cuts in both directions.

For the American Opportunity credit, you can also count books, supplies, and required course equipment even when you bought them from Amazon or a local bookstore.⁴ A student whose form shows $3,000 in net tuition but who spent another $1,000 on textbooks and a required laptop can claim up to $4,000 in qualified expenses. Keep the receipts, because none of that shows up on the form. The Lifetime Learning Credit is narrower: course materials generally count only if the school required you to buy them from the school as a condition of enrollment.

Some costs never qualify, no matter how necessary they feel. Room and board, transportation, student health fees, and insurance are not qualified education expenses.⁵ Box 1 sometimes bundles in a charge that doesn’t qualify, so your own payment records are what actually support the number you put on your return.

Which Credit the Form Feeds

Both credits are claimed on Form 8863, which you attach to your Form 1040.⁶ You can only use one per student per year, so pick the one worth more.

American Opportunity Tax Credit

Worth up to $2,500 per eligible student. Up to $1,000 of it is refundable, meaning you can receive it even if you owe no tax.⁷ It’s limited to the first four years of higher education, and the student must be pursuing a degree or recognized credential, enrolled at least half-time for at least one academic period, and free of a felony drug conviction at the federal or state level.

Lifetime Learning Credit

Worth up to $2,000 per tax return, not per student. It equals 20% of the first $10,000 in qualified expenses.⁸ It’s entirely nonrefundable. There’s no year cap, no half-time requirement, and it covers graduate school and single courses taken to improve job skills. For anyone past their fourth undergraduate year or picking up a professional credential, it’s the only option.

Income and Filing-Status Limits

Both credits phase out at the same income levels. The credit shrinks between $80,000 and $90,000 in modified adjusted gross income for single filers, and between $160,000 and $180,000 for married filing jointly. Above the top of each range, the credit is gone.⁹

Two filing rules catch people out. Married filing separately disqualifies you from either credit.⁶ And starting in 2026, both the person claiming the credit and the student listed on the claim must have a Social Security Number valid for work, issued before the return’s due date; an ITIN no longer qualifies.¹⁰

Who Actually Claims It

If someone claims you as a dependent, only that person can claim the education credit for your expenses. You cannot claim it yourself.⁶

The reverse is also true. If a parent is entitled to claim a student as a dependent but chooses not to, only the student can take the credit; the parent can’t claim a credit for a student they didn’t actually claim.¹⁰ Families should run the numbers both ways. The parent’s higher marginal rate often makes claiming the dependent and the credit on the parent’s return the better deal, but not always.

Scholarships, 529s, and the No-Double-Dipping Rule

You cannot use the same dollar of tuition to both take a tax-free 529 withdrawal and claim an education credit. Tax-free educational assistance has to be subtracted from your qualified expenses before you calculate the credit.¹¹ That includes scholarships, Pell Grants, employer tuition assistance, veterans’ benefits, and the tax-free portion of 529 distributions.

A common planning move: pull enough from the 529 to cover room, board, and other non-qualifying costs tax-free, and use out-of-pocket money for the tuition that drives the credit. The point is to keep the expenses from overlapping.

If Box 5 is bigger than your qualified expenses, the excess is generally taxable income to the student. Scholarship money spent on room, board, or travel doesn’t keep its tax-free status.¹² A full-ride that also pays for housing will likely leave the student owing tax on the housing piece. Nothing on the 1098-T flags the taxable amount; you have to work it out.

If the Form Is Missing or Wrong

If you don’t have a 1098-T by late January, check the student portal, then contact the registrar or bursar. Not receiving the form doesn’t eliminate your right to the credit as long as you have payment records of your own.⁴

Errors — wrong name, wrong Social Security Number, wrong dollar amount — have to be fixed by the school, not by you. Ask for a corrected 1098-T. Don’t just override the numbers on your return without documentation to back it up.³ Your bank statements, credit card receipts, and bookstore invoices are what will carry the day if the IRS asks questions. Treat the 1098-T as a rough outline and your own records as the real evidence.

1
Internal Revenue Service. About Form 1098-T, Tuition Statement
2
Office of the Law Revision Counsel. 26 USC 6050S
3
Internal Revenue Service. Instructions for Forms 1098-E and 1098-T (2025)
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Internal Revenue Service. Education Credits – Questions and Answers
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Internal Revenue Service. Qualified Education Expenses
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Internal Revenue Service. Education Credits – American Opportunity Tax Credit (AOTC) and Lifetime Learning Credit (LLC)
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Internal Revenue Service. American Opportunity Tax Credit
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Internal Revenue Service. Lifetime Learning Credit
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Internal Revenue Service. Instructions for Form 8863 (2025)
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Internal Revenue Service. Publication 970 (2025) – Tax Benefits for Education
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Internal Revenue Service. No Double Education Benefits Allowed
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Internal Revenue Service. Topic No. 421 – Scholarships, Fellowship Grants, and Other Grants