Understanding the 1098-T tax form is crucial for students and families navigating education expenses. This document, issued by eligible educational institutions, helps determine eligibility for valuable tax credits such as the American Opportunity Credit and Lifetime Learning Credit.
Billed Tuition and Fees in Box 2
Box 2 of the 1098-T form is no longer used. Schools now report payments received for qualified tuition and related expenses in Box 1, and Box 2 is reserved for future use.1Internal Revenue Service. Instructions for Forms 1098‑E and 1098‑T (2025)
Qualifying Tuition
Qualifying tuition generally means tuition amounts and required charges that are directly tied to enrollment or attendance at an eligible postsecondary institution. Amounts paid for personal or living expenses, such as room and board, are not qualifying expenses for education credits.
Mandatory Fees
Mandatory institutional fees can qualify when they are required as a condition of enrollment or attendance. Personal or nonacademic costs, including room, board, insurance, and transportation, do not qualify for education credits.2Internal Revenue Service. Qualified Education Expenses
Required Course Materials
Required course materials are handled differently by credit. For the American Opportunity Tax Credit, books, supplies, and equipment needed for a course qualify even if you didn’t buy them from the school; for the Lifetime Learning Credit, such materials qualify only if you had to pay the school for them as a condition of enrollment or attendance.3Internal Revenue Service. Education Credits: Questions and Answers
Adjustments for Changed Enrollments
Changes in enrollment status, such as adding or dropping courses or receiving refunds, can affect what is reported for the year. Schools use adjustment boxes on Form 1098‑T to reflect prior‑year changes when applicable.
Timing of Institutional Reporting
Educational institutions provide Form 1098‑T each winter for the prior calendar year so students and families have time to review the information for their tax returns. Academic calendars and billing cycles can differ, so always compare the form to your own payment records.
Records to Keep for Verification
Maintain the Form 1098‑T, student account statements, receipts for tuition, required fees, and course materials, and any bank or credit card records that show payments. Good records make it easier to reconcile your 1098‑T to what you actually paid and to support any education credits you claim.