IRS Form 1098-T, or the Tuition Statement, is a tax form used to report tuition and other related expenses to the Internal Revenue Service (IRS) and the student or taxpayer. This form is used to report payments made to eligible educational institutions for tuition and related expenses, as well as any scholarships or grants received.

The purpose of Form 1098-T is to help taxpayers determine whether they are eligible for the American Opportunity Tax Credit (AOTC) or the Lifetime Learning Credit (LLC). These tax credits can provide a significant financial benefit to taxpayers paying for higher education expenses.

The educational institution typically provides the form, and it must be furnished to the student by January 31st of the year following the tax year. Educational institutions must file the form with the IRS by the last day of February if filing electronically and the last day of March if filing on paper.

Form 1098-T includes the following information:

• The name, address, and taxpayer identification number (TIN) of the student or taxpayer
• The name and TIN of the educational institution
• The amount of payments received for qualified tuition and related expenses
• Any scholarships or grants received
• Any adjustments made to prior years’ payments
• Any amounts billed to the student for insurance or other non-qualified expenses

It’s important to note that Form 1098-T only reports the amount of payments received by the educational institution, not the amount that was actually paid by the student or taxpayer. Therefore, students or taxpayers should keep records of their payments, such as canceled checks, credit card statements, or receipts, to help them accurately report the information on their tax returns.

Taxpayers should also know that Form 1098-T does not guarantee eligibility for the AOTC or LLC. Taxpayers should review the instructions for Forms 8863 and 8863-T to determine their eligibility and how to claim the credit.

In summary, IRS Form 1098-T reports tuition and other related expenses to the IRS and the student or taxpayer. The form is used to help taxpayers determine their eligibility for the American Opportunity Tax Credit (AOTC) or the Lifetime Learning Credit (LLC). Educational institutions are responsible for providing the form to the student and filing it with the IRS by the end of February or March. Taxpayers should keep records of their payments to accurately report the information on their tax returns and review the instructions for Forms 8863 and 8863-T to determine their eligibility for the AOTC or LLC credit.