How to Read IRS Form 1098-T
By Muntasir • Published Dec 31, 2023 • Updated Sep 20, 2026 • Student Life
Form 1098-T reports the tuition your school billed or received and the scholarships it paid on your behalf, the numbers you need to claim an education tax credit worth up to 2,500 dollars.
🎓 Box 1 shows payments received for qualified tuition and fees
💵 Box 5 shows scholarships and grants paid to the school
Subtract box 5 from box 1 to estimate your out-of-pocket qualified expenses
Box 8 checked means you were enrolled at least half time
Use the form with IRS Form 8863 to claim the American Opportunity or Lifetime Learning Credit
What Form 1098-T Shows
Your college or university sends Form 1098-T each January to report tuition payments and scholarship or grant amounts from the prior calendar year. You and the IRS both get a copy.
The form does not calculate your tax credit. It gives you the raw numbers: what the school billed or received for tuition and fees, and what scholarships or grants covered part of that bill. Plug these numbers into your tax return to figure out the credit yourself.
Who Gets One
Schools eligible to participate in federal student aid programs send a 1098-T to any student who paid qualified tuition and related expenses during the year, with a few exceptions. You will not get one if scholarships and grants covered your tuition entirely with no out-of-pocket payment, if you took only noncredit courses, or if you are a nonresident alien student who did not request one.
Look for the form in your student portal or mailbox by January 31. Many schools post it electronically instead of mailing a paper copy.
Reading Each Box
The IRS instructions for Forms 1098-E and 1098-T define what each box means. Here is what to check first.
| Box | What it reports |
|---|---|
| Box 1 | Payments the school received for qualified tuition and related expenses, minus refunds |
| Box 4 | Adjustments to a prior year box 1 amount, for example a refund |
| Box 5 | Scholarships and grants paid directly to the school on your behalf |
| Box 6 | Adjustments to a prior year scholarship or grant amount |
| Box 7 | Checked if box 1 includes payments for a term starting January through March of the next year |
| Box 8 | Checked if you were enrolled at least half time |
| Box 9 | Checked if you were enrolled in a graduate program |
| Box 10 | Insurance reimbursements related to tuition, reported by an insurer |
Box 1 and box 5 matter most. Subtract box 5 from box 1 for a rough estimate of what you or your family paid out of pocket toward qualified tuition. This number sits close to, but not always identical to, the qualified expenses you claim on your tax return, since some fees on your bill, such as housing, meal plans, and transportation, do not count.
Turning the Form Into a Tax Credit
Whoever claims you as a dependent, or you if nobody claims you, uses the 1098-T numbers on Form 8863 to claim the American Opportunity Tax Credit or the Lifetime Learning Credit.
The American Opportunity Tax Credit covers up to 2,500 dollars per student in the first four years of a degree: 100 percent of the first 2,000 dollars in qualified expenses plus 25 percent of the next 2,000 dollars. It phases out for a modified adjusted gross income above 80,000 dollars for single filers or 160,000 dollars for joint filers, and disappears above 90,000 dollars single or 180,000 dollars joint.
The Lifetime Learning Credit covers 20 percent of up to 10,000 dollars in expenses, a maximum of 2,000 dollars, for any level of postsecondary or job-skill coursework, with no limit on how many years you claim it. Its phaseout starts at the same 90,000 dollars single or 180,000 dollars joint MAGI, according to the IRS education credits page . Claim only one of the two credits per student per year.
Common Mistakes to Avoid
Box 1 is not automatically your deductible amount. Room, board, insurance, transportation, and most student fees do not count as qualified expenses even though they show up on your billing statement.
If box 5 scholarships exceed box 1 tuition charges, the extra amount may count as taxable income to the student, especially if any of it paid for room and board. Check this before assuming your scholarship is entirely tax free.
Coordinate with any 529 plan withdrawals. Do not double count tuition dollars for both a tax credit and a tax free 529 distribution. Set aside enough qualified expenses to cover the credit before applying 529 funds.
If your school did not send a 1098-T, that is not blanket permission to skip claiming a credit. Keep your own payment records and claim the credit anyway, as long as your expenses qualify.
Part-Time and Graduate Students
Part-time enrollment does not disqualify you from getting a 1098-T or claiming an education credit, though it changes which credit fits. The American Opportunity Tax Credit requires at least half-time enrollment for one academic period during the year, shown by a checked box 8. Graduate students, shown by a checked box 9, do not qualify for the American Opportunity Tax Credit but still qualify for the Lifetime Learning Credit.
Keep the Form With Your Records
Save your 1098-T and your own payment records for at least three years after you file, the standard window the IRS uses to review a return. If the school later issues a corrected 1098-T through box 4 or box 6, amend the affected tax year's return if the change alters the credit you claimed.