You enter Form 1098-T on TaxSlayer by navigating to the Federal Section, selecting Deductions, then Credits, and finally choosing Education Credits. From there, TaxSlayer guides you through entering information from your 1098-T form, which your college or university sends to report qualified tuition and related expenses you paid during the tax year.
Federal law under Internal Revenue Code Section 25A requires eligible educational institutions to provide Form 1098-T to students who paid qualified educational expenses. This requirement exists because Congress established education tax credits to make higher education more affordable for American families. The statute creates two distinct tax credits—the American Opportunity Tax Credit and the Lifetime Learning Credit—and mandates specific reporting procedures. If you fail to properly report your 1098-T, you forfeit valuable tax savings and may face IRS scrutiny during an audit, potentially triggering penalties and interest charges on improperly claimed credits.
According to data from the American Council on Education, approximately 9.5 million taxpayers received $14 billion through higher education tax credits in 2023, with the majority of recipients earning below $80,000 annually.
What You Will Learn:
📚 Step-by-step navigation through TaxSlayer’s interface to accurately enter every box from your Form 1098-T and maximize your education tax credits
💰 Calculation methods for determining whether the American Opportunity Tax Credit or Lifetime Learning Credit provides the greater benefit for your specific situation
⚠️ Common mistakes that trigger IRS audits and result in denied credits, plus proven strategies to avoid these costly errors
🎓 Eligibility requirements for students, parents, and dependents, including income limits, enrollment status, and the specific relationship between who pays expenses and who claims the credit
🔍 Real-world scenarios with actual dollar amounts showing how scholarships, grants, and prepaid tuition affect your qualified expenses and credit calculations
Understanding Form 1098-T and Its Purpose
Form 1098-T serves as an informational document that educational institutions must furnish to students who paid qualified tuition and related expenses during the calendar year. The Internal Revenue Service requires colleges, universities, and vocational schools participating in federal student aid programs to report these payments. This reporting obligation stems from the Taxpayer Relief Act of 1997, which established education tax credits.
The form reports payments received for qualified tuition and related expenses in Box 1. Beginning in tax year 2018, the IRS changed the reporting method from amounts billed to amounts actually paid during the calendar year. This shift means Box 1 reflects what you or someone on your behalf actually paid to the institution, not what appeared on your student account billing statement.
Qualified tuition and related expenses include tuition, mandatory enrollment fees, and course materials required for enrollment. Room and board expenses do not qualify. Transportation costs do not qualify. Health insurance fees do not qualify, even when the school requires coverage. Optional student activity fees do not qualify unless the institution mandates them as a condition of enrollment.
The form includes the educational institution’s name, address, and Employer Identification Number in the top section. You need this EIN to claim the American Opportunity Tax Credit. Without the EIN, you cannot file your return electronically and may lose eligibility for the credit entirely.
Decoding Each Box on Form 1098-T
Box 1: Payments Received for Qualified Tuition and Related Expenses
Box 1 displays the total payments the school received from all sources during the calendar year. This amount includes payments you made directly, payments your parents made, payments from third parties like grandparents, and payments from employer tuition assistance programs. The institution reports when it receives the payment, not when you incurred the charge.
Many students pay spring semester tuition in December of the prior year. When you pay December 2025 tuition for spring 2026 classes, the school reports that payment on your 2025 Form 1098-T. This prepayment creates planning opportunities because you can claim those expenses on your 2025 tax return even though you attend classes in 2026.
Box 1 does not include amounts paid for room and board. It does not include amounts paid for parking permits. It does not include amounts paid for health services fees. It does not include amounts paid for athletic facility fees unless the school requires these fees as a condition of enrollment.
Box 4: Adjustments Made for a Prior Year
Box 4 reports adjustments to qualified tuition and related expenses that the school reported on a prior year’s Form 1098-T. These adjustments occur when the institution provides refunds or makes reductions to previously reported amounts. A positive number in Box 4 means the school refunded more money than originally reported, reducing your prior year qualified expenses.
When Box 4 contains an amount, you face a tax recapture situation. If you claimed an education credit on a prior year return and Box 4 now shows your expenses were lower, you must recalculate your prior year credit. The difference between the credit you claimed and the credit you should have claimed becomes additional tax on your current year return.
To report Box 4 amounts in TaxSlayer, navigate to Federal Section, then Other Taxes, then Other Additional Taxes, and select “Tax from recapture of an education credit.” You enter the amount by which your prior year credit must be reduced.
Box 5: Scholarships or Grants
Box 5 shows scholarships and grants the institution administered and processed during the calendar year. This includes merit scholarships from the school itself. It includes need-based Pell Grants. It includes state grant programs. It includes scholarships from civic organizations that the school processed through its financial aid office.
Box 5 does not include student loans. Loan proceeds represent borrowed money you must repay, not gifts, so they do not reduce your qualified expenses. Box 5 does not include money from your parents. Family contributions do not constitute scholarships or grants. Box 5 does not include work-study earnings because you provide services in exchange for those payments.
The relationship between Box 1 and Box 5 determines your net qualified expenses. When Box 5 exceeds Box 1, your scholarships covered more than your qualified tuition and related expenses. This situation often occurs when students receive generous financial aid packages that cover both tuition and living expenses.
Box 6: Adjustments to Scholarships or Grants for a Prior Year
Box 6 reports adjustments to scholarships or grants the school reported on a prior year Form 1098-T. When a scholarship gets reduced or withdrawn after the institution reported it, Box 6 shows that adjustment. A positive number in Box 6 means scholarships decreased, potentially increasing your qualified expenses for the prior year.
If Box 6 contains an amount, you may need to file an amended return for the prior year. The adjustment might entitle you to a larger education credit than you originally claimed. You have three years from the original filing deadline to amend a return and claim additional refunds.
Box 7: Check if Amounts Include Academic Period Beginning January Through March
Box 7 receives a checkmark when Box 1 includes payments for an academic period beginning in January through March of the following year. Most schools begin spring semester in January. When you pay spring tuition in December, Box 7 gets checked to alert you that the payment relates to next year’s academic period.
The checkmark matters because it affects when you claim the credit. Under IRS rules in Publication 970, you can claim education credits for payments made during the tax year for academic periods that begin in that tax year or in the first three months of the following year. This prepayment rule lets you accelerate your tax benefit.
Some universities start spring semester in December rather than January. When a school begins its spring term on December 15, Box 7 remains unchecked even though the payment relates to spring semester. The IRS designed Box 7 specifically for academic periods starting January through March.
Box 8: Check if at Least Half-Time Student
Box 8 receives a checkmark when the school considers you enrolled at least half-time for at least one academic period during the calendar year. Schools define half-time status based on their own academic standards. For most institutions, half-time means six credit hours per semester.
The Box 8 checkmark indicates you meet one requirement for the American Opportunity Tax Credit. The AOTC requires half-time enrollment. The Lifetime Learning Credit does not require half-time enrollment, allowing students taking even one course to qualify.
Students enrolled in multiple schools during the year receive separate Forms 1098-T from each institution. One school might check Box 8 while another does not. You meet the half-time requirement if any of your schools check Box 8 for any academic period during the year.
Box 9: Check if Graduate Student
Box 9 receives a checkmark when you enroll in a program leading to a graduate degree, graduate-level certificate, or other recognized graduate-level credential during the calendar year. This checkmark disqualifies you from the American Opportunity Tax Credit because the AOTC applies only to undergraduate students in their first four years.
Graduate students remain eligible for the Lifetime Learning Credit. The LLC covers graduate courses, professional degree programs, and courses to acquire or improve job skills. Many graduate students find the LLC provides their only available education tax benefit.
Students pursuing both undergraduate and graduate courses during the same year must determine which program dominated their enrollment. If you completed your bachelor’s degree in May and began graduate school in August, the institution typically checks Box 9 because you were a graduate student for part of the year.
Box 10: Insurance Contract Reimbursement
Box 10 shows amounts paid by an insurer under a tuition insurance policy. These amounts represent reimbursements when students withdraw for medical reasons, family emergencies, or other covered events. The insurance payment reduces your qualified expenses because the insurer reimbursed the school for charges you did not ultimately incur.
Most students never see an amount in Box 10. Tuition insurance remains relatively uncommon, and claims occur only when students withdraw under specific circumstances. When Box 10 contains a figure, subtract it from your total qualified expenses before calculating education credits.
Navigating to Education Credits in TaxSlayer
TaxSlayer organizes its interface into distinct sections: Federal Section, State Section, and Review. The Form 1098-T entry process occurs entirely within the Federal Section. You must complete income and adjustment entries before TaxSlayer allows you to proceed to education credits.
Begin by logging into your TaxSlayer account and selecting your current year tax return. If you use TaxSlayer Classic, Premium, or Self-Employed, the navigation path remains identical across all versions. The interface displays “Federal Section” prominently near the top of your screen.
Click on Federal Section to expand the menu. You see several subcategories including Income, Deductions, Credits, and Other Taxes. Education credits fall under the Credits category because they directly reduce your tax liability dollar-for-dollar rather than merely reducing your taxable income.
Step-by-Step Entry Process
Step 1: Click Federal Section from your main tax return screen. The program may ask whether you have entered all income and adjustments. Answer Yes to proceed. If you answer No, TaxSlayer redirects you to complete those sections first because your Adjusted Gross Income affects education credit eligibility.
Step 2: Select Deductions from the expanded Federal Section menu. This selection opens another submenu showing various deduction and credit options. The term “Deductions” here serves as a broad category encompassing both deductions that reduce income and credits that reduce tax.
Step 3: Click Select My Forms within the Deductions submenu. This option provides access to forms and schedules beyond basic income reporting. The program displays a list of available forms and categories.
Step 4: Choose Credits from the list. This selection opens the credits submenu where you find various tax credits including child tax credit, retirement savings contributions credit, and education credits.
Step 5: Click Education Credits. TaxSlayer now launches the Form 8863 interview process. Form 8863 serves as the official IRS form for calculating and claiming education credits.
The program asks a series of questions to determine eligibility and calculate the optimal credit. Each question requires careful attention because incorrect answers can disqualify you from valuable tax benefits or trigger IRS inquiries.
Entering Student Information
TaxSlayer first asks you to identify the eligible student. If you file as an individual claiming credits for yourself, select your own name from the dropdown menu. If you file jointly and claim credits for yourself or your spouse, the program shows both names. If you claim credits for a dependent, the dependent’s name appears in the list.
After selecting the student, TaxSlayer asks whether the student received Form 1098-T from their educational institution. Answer Yes if the student received the form. The program then asks you to indicate whether you have the form available. Answer Yes and proceed to enter the information from each box.
If the student did not receive Form 1098-T, you can still claim education credits under specific circumstances outlined in IRS guidance. You must demonstrate the student attended an eligible institution and substantiate payment of qualified expenses through receipts, bank statements, or school billing records. TaxSlayer guides you through alternative documentation requirements.
Educational Institution Information
TaxSlayer requires you to enter the educational institution’s name exactly as it appears on Form 1098-T. Type the full official name without abbreviations. Enter “University of California, Los Angeles” rather than “UCLA.” Enter “Massachusetts Institute of Technology” rather than “MIT.”
The program asks for the institution’s street address, city, state, and ZIP code. This information appears on Form 1098-T in the top section. Enter each component in the designated field. TaxSlayer validates the ZIP code format to ensure accuracy.
You must enter the institution’s Employer Identification Number from Box 1098-T. The EIN consists of nine digits formatted as XX-XXXXXXX. Type the number carefully because an incorrect EIN can prevent electronic filing and disqualify you from the American Opportunity Tax Credit. If your Form 1098-T does not show an EIN, contact your school’s registrar or student accounts office immediately.
Entering Box Amounts
TaxSlayer presents fields corresponding to each box on Form 1098-T. Enter the exact dollar amount shown in Box 1 for payments received for qualified tuition and related expenses. If Box 1 shows $12,450, enter 12450. Do not include dollar signs or commas. TaxSlayer formats the number automatically.
Enter the amount from Box 4 for adjustments made for a prior year. If Box 4 remains blank on your Form 1098-T, enter zero or leave the field blank depending on TaxSlayer’s interface requirements. The program typically accepts either approach for empty boxes.
Enter the amount from Box 5 for scholarships or grants. This entry critically affects your credit calculation because scholarships reduce qualified expenses. If Box 5 shows $8,000 and Box 1 shows $12,000, your preliminary qualified expenses equal $4,000. However, you can add qualifying expenses not reported on Form 1098-T.
Enter the amount from Box 6 for adjustments to scholarships or grants for a prior year. Like Box 4, most forms show Box 6 as blank. Enter zero or leave blank as the interface permits.
Indicate whether Box 7 contains a checkmark by clicking Yes or No in TaxSlayer’s interface. This yes/no question alerts the program that your Box 1 amount includes prepaid expenses for an academic period beginning January through March of the following year.
Indicate whether Box 8 contains a checkmark. A Yes answer confirms you attended at least half-time for at least one academic period. This confirmation helps TaxSlayer determine whether you meet American Opportunity Tax Credit requirements.
Indicate whether Box 9 contains a checkmark. A Yes answer identifies you as a graduate student, automatically excluding you from AOTC eligibility and directing the program to calculate only the Lifetime Learning Credit.
Enter any amount from Box 10 for insurance contract reimbursement. Most students leave this field blank because tuition insurance claims occur infrequently.
Adding Additional Qualified Expenses
After entering Form 1098-T information, TaxSlayer asks whether you paid additional qualified expenses not included on the form. This question provides the opportunity to claim expenses for required books, supplies, and equipment.
For the American Opportunity Tax Credit, qualified expenses include required course materials whether purchased from the school or from outside vendors. If your chemistry class required a $200 lab kit purchased from an online retailer, that $200 qualifies. If your art history class required a $150 textbook purchased from a bookstore off campus, that $150 qualifies.
Keep receipts documenting these purchases. The IRS may request substantiation during an audit. Your receipts must show the item purchased, the date of purchase, the seller, and the amount paid. Credit card statements alone do not suffice because they do not identify specific items purchased.
For the Lifetime Learning Credit, qualified expenses include only tuition and fees required for enrollment. Books and supplies qualify only if you must purchase them directly from the institution as a condition of enrollment. The LLC provides a narrower definition of qualified expenses compared to the AOTC.
TaxSlayer provides a field for you to enter the total additional qualified expenses. If you purchased $450 in required textbooks and $200 in required lab equipment, enter 650. The program adds this amount to Box 1 from your Form 1098-T when calculating your total qualified expenses.
Eligibility Questions
TaxSlayer asks a series of eligibility questions to determine which credits you qualify for and calculate the optimal benefit. The questions vary slightly depending on whether you selected yourself, your spouse, or a dependent as the eligible student.
The program asks whether the student was enrolled at least half-time for at least one academic period beginning in the tax year. Answer Yes if Box 8 on Form 1098-T showed a checkmark. Answer No if Box 8 remained blank. This question directly affects AOTC eligibility because half-time enrollment constitutes a requirement.
TaxSlayer asks whether the student was in the first four years of postsecondary education at the beginning of the tax year. Answer Yes for freshmen, sophomores, juniors, and seniors who have not completed their bachelor’s degree. Answer No for graduate students, post-baccalaureate students, or undergraduates who have already completed four years of postsecondary education. Students who took time off between high school and college still count the actual years of postsecondary education completed.
The program asks whether the student was pursuing a degree or recognized educational credential. Answer Yes for students enrolled in associate degree programs, bachelor’s degree programs, or eligible certificate programs. Answer No for students taking isolated classes for personal enrichment without pursuing a credential.
TaxSlayer asks whether the student had any felony drug convictions at the end of the tax year. A felony drug conviction permanently disqualifies students from the American Opportunity Tax Credit. This harsh provision dates to 1990s policy but remains in effect. The Lifetime Learning Credit contains no such restriction.
The program asks how many years you have claimed the American Opportunity Tax Credit for this student. The AOTC allows only four years of claims per student. If you claimed the credit in 2022, 2023, and 2024 for the same student, you can claim it one more time in 2025 before exhausting eligibility. The four years need not be consecutive. Students who take time off and return to school can still use remaining AOTC years.
Understanding the American Opportunity Tax Credit
The American Opportunity Tax Credit provides up to $2,500 per eligible student per year for the first four years of postsecondary education. Congress designed the AOTC to make college more affordable for middle-income families by offering substantial tax relief during the expensive undergraduate years.
The credit calculation follows a two-tier structure. You receive 100 percent of the first $2,000 of qualified expenses. You receive 25 percent of the next $2,000 of qualified expenses. To claim the maximum $2,500 credit, you need $4,000 in qualified expenses after reducing for scholarships and grants.
Partially Refundable Nature
The AOTC stands apart from most education tax benefits because 40 percent of the credit is refundable. Refundable credits can generate a refund even when you owe no tax. If your tax liability equals zero and you qualify for a $2,500 AOTC, you receive $1,000 as a refund.
The refundable portion helps lower-income students who have little or no tax liability. A student working part-time and earning $15,000 annually might owe minimal federal income tax. Without the refundable feature, the credit would provide little benefit. With refundability, that student can receive up to $1,000 back from the IRS.
The nonrefundable portion—60 percent of the credit or up to $1,500—reduces your tax liability to zero but cannot create a refund. If you owe $800 in taxes and qualify for a $2,500 AOTC, the first $800 reduces your tax to zero. The next $1,000 comes to you as a refund because of the 40 percent refundable provision. The remaining $700 provides no benefit because you have exhausted your refundability limit.
Income Limits and Phase-Out
The AOTC phases out based on Modified Adjusted Gross Income. For tax year 2025, single filers with MAGI below $80,000 qualify for the full credit. The credit phases out between $80,000 and $90,000 MAGI. Single filers with MAGI at or above $90,000 receive no credit.
Married couples filing jointly with MAGI below $160,000 qualify for the full credit. The credit phases out between $160,000 and $180,000 MAGI. Joint filers with MAGI at or above $180,000 receive no credit.
The phase-out occurs proportionally. A single filer with $85,000 MAGI falls exactly halfway through the $80,000 to $90,000 phase-out range. That taxpayer receives 50 percent of the calculated credit. If the full credit equals $2,500, the phase-out reduces it to $1,250.
MAGI for education credit purposes typically equals your Adjusted Gross Income from Form 1040 with certain adjustments added back. Most taxpayers find their MAGI equals their AGI because the adjustments apply to relatively uncommon situations like foreign earned income exclusion.
Student Requirements
The eligible student must be pursuing a degree or recognized educational credential at an eligible institution. The student must be enrolled at least half-time for at least one academic period beginning during the tax year. The student must not have completed the first four years of postsecondary education before the beginning of the tax year.
The school determines what constitutes half-time enrollment based on its academic standards. For most institutions offering traditional semester-based programs, half-time means six credit hours per semester. For quarter-based schools, half-time typically means eight credit hours per quarter. Schools using clock hours rather than credit hours define half-time enrollment according to their specific programs.
The student cannot have claimed the AOTC for more than four tax years. This lifetime limitation prevents students from claiming the credit indefinitely. Students who take six years to complete a bachelor’s degree can claim the credit for only four of those six years. Strategic planning suggests claiming the credit during years with the highest qualified expenses.
The student cannot have a felony drug conviction at the end of the tax year. This controversial restriction applies only to the AOTC. Students with drug convictions remain eligible for the Lifetime Learning Credit. Advocacy groups have challenged this provision, arguing it creates an additional barrier for individuals trying to rebuild their lives through education.
Understanding the Lifetime Learning Credit
The Lifetime Learning Credit provides up to $2,000 per tax return for qualified education expenses. Unlike the AOTC, which allows $2,500 per student, the LLC caps at $2,000 per return regardless of how many students you claim. A family with three students in college can claim a maximum $2,000 LLC total, not $2,000 per student.
The credit equals 20 percent of qualified expenses up to $10,000. If you paid $10,000 or more in qualified expenses, you receive the maximum $2,000 credit. If you paid $5,000 in qualified expenses, you receive a $1,000 credit. The calculation follows a straightforward percentage approach without the AOTC’s two-tier structure.
Nonrefundable Credit Limitation
The Lifetime Learning Credit is entirely nonrefundable. Nonrefundable credits can reduce your tax liability to zero but cannot create a refund. If you owe $1,500 in taxes and qualify for a $2,000 LLC, the credit reduces your tax to zero. The remaining $500 of unused credit provides no benefit because the credit cannot generate a refund.
This nonrefundable nature makes the LLC less valuable for lower-income taxpayers who have minimal tax liability. A student earning $20,000 annually might owe little federal income tax. If that student owes $300 in tax, the LLC can offset only $300 of tax liability. The remaining $1,700 of potential credit goes unused.
Taxpayers with higher incomes and corresponding higher tax liabilities gain more benefit from the LLC. A professional earning $75,000 who returns to school for graduate courses might owe $8,000 in federal taxes. That taxpayer can use the full $2,000 LLC to reduce tax to $6,000, capturing the complete credit value.
Income Limits and Phase-Out
The LLC uses the same income limits as the AOTC. For tax year 2025, single filers with MAGI below $80,000 qualify for the full credit. The credit phases out between $80,000 and $90,000 MAGI. Single filers with MAGI at or above $90,000 receive no credit.
Married couples filing jointly with MAGI below $160,000 qualify for the full credit. The credit phases out between $160,000 and $180,000 MAGI. Joint filers with MAGI at or above $180,000 receive no credit.
The identical income limits create situations where taxpayers qualify for both credits or neither credit based solely on income. A couple earning $175,000 jointly phases out of both credits at the same rate. A couple earning $155,000 jointly receives the full amount of whichever credit provides greater benefit.
Broader Student Eligibility
The LLC accommodates a wider range of students compared to the AOTC. Graduate students qualify for the LLC. Professional school students qualify. Continuing education students qualify. Students taking individual courses to acquire or improve job skills qualify even without pursuing a degree.
The LLC requires no minimum enrollment level. A student taking one three-credit course per semester qualifies. Part-time students taking night classes while working full-time qualify. This flexibility makes the LLC particularly valuable for working professionals enhancing their skills through education.
The LLC has no limit on the number of years you can claim it. A student who claimed the credit in 2020, 2021, 2022, 2023, and 2024 can claim it again in 2025 and every subsequent year with qualifying expenses. This unlimited duration supports lifelong learning and career development throughout one’s working life.
The LLC includes no felony drug conviction restriction. Students with any type of criminal history retain eligibility as long as they meet other requirements. This inclusive approach acknowledges education’s role in rehabilitation and personal growth.
Calculating Your Qualified Education Expenses
Qualified education expenses form the foundation for education tax credit calculations. You must determine the exact dollar amount of expenses that qualify under IRS rules, then reduce that amount by tax-free educational assistance. The resulting figure represents your adjusted qualified education expenses used to calculate credits.
Starting with Form 1098-T Box 1
Begin with the amount shown in Box 1 of your Form 1098-T. This figure represents payments your school received for qualified tuition and related expenses during the calendar year. The amount includes payments from all sources—you, your parents, your grandparents, and any other third parties.
Box 1 already excludes certain expenses. Room and board charges do not appear in Box 1 even though you paid them to the school. Student health insurance fees do not appear in Box 1. Parking permit fees do not appear. The institution reports only expenses that meet the IRS definition of qualified tuition and related expenses.
The timing of payments affects Box 1. If you paid fall 2025 tuition on August 15, 2025, that payment appears on your 2025 Form 1098-T. If you paid spring 2026 tuition on December 10, 2025, that payment also appears on your 2025 Form 1098-T because the school received it in calendar year 2025.
Adding Qualifying Books and Supplies
For the American Opportunity Tax Credit, add the cost of required course materials purchased outside the school. Your biology class required a $180 textbook you purchased from Amazon. Your engineering class required a $95 scientific calculator you purchased from an office supply store. Your art class required $120 in specialized supplies you purchased from an art supply retailer.
Total these additional qualifying expenses: $180 + $95 + $120 = $395. Add this $395 to your Box 1 amount. If Box 1 showed $9,500, your total qualified expenses before adjustments equal $9,895.
Document these purchases carefully. Save your receipts, packing slips, and credit card statements. The IRS requires substantiation showing what you purchased, when you purchased it, from whom you purchased it, and how much you paid. An Amazon order confirmation email showing purchase of the required textbook provides excellent documentation.
For the Lifetime Learning Credit, books and supplies qualify only if you must purchase them directly from the school as a condition of enrollment. Most schools do not require students to purchase books from the campus bookstore. When the school allows you to obtain materials from any source, those externally purchased materials do not qualify for the LLC. This narrower definition limits LLC expenses compared to the AOTC.
Subtracting Scholarships and Grants
Subtract the amount shown in Box 5 of your Form 1098-T from your total qualified expenses. Box 5 reports scholarships and grants the school administered. Tax-free educational assistance reduces your qualifying expenses because you cannot claim a tax credit for expenses you did not truly bear.
If your qualified expenses equal $9,895 and Box 5 shows $3,500 in scholarships, your adjusted qualified expenses equal $6,395. You use this $6,395 figure to calculate your education credit. The scholarship covered $3,500 of your expenses, leaving you responsible for $6,395.
Certain scholarships do not appear in Box 5 but still reduce your qualified expenses. Outside scholarships from community organizations, churches, or employers that paid you directly rather than through the school do not show up on Form 1098-T. You must manually account for these scholarships when calculating adjusted qualified expenses.
Room and board scholarships create a strategic opportunity. If your scholarship restricts use to tuition and fees, you must reduce qualified expenses dollar-for-dollar. If your scholarship allows unrestricted use for any educational expense including room and board, you can allocate part of the scholarship to nonqualifying expenses like room and board. This allocation preserves more qualified expenses for education credit purposes.
Handling Multiple Students
When you claim education credits for multiple students, calculate qualified expenses separately for each student. Your daughter attended State University with $12,000 in qualified expenses and $4,000 in scholarships. Your son attended Community College with $4,500 in qualified expenses and no scholarships. Calculate your daughter’s adjusted qualified expenses as $8,000. Calculate your son’s adjusted qualified expenses as $4,500.
TaxSlayer guides you through separate entries for each student. After completing the first student’s information, the program asks whether you want to add another student. Click “Add Another Institution” if the same student attended multiple schools. Click “Add Another Student” if you have a second student entirely.
The total credit you receive depends on which credits you claim for which students. The AOTC allows $2,500 per student, so having two AOTC-eligible students can yield $5,000 in credits. The LLC allows only $2,000 per return regardless of student count, so multiple LLC students do not multiply the credit.
Strategic planning suggests claiming AOTC for students who qualify while using LLC for those who do not qualify for AOTC. Your daughter in her junior year of college qualifies for AOTC. Your son in graduate school qualifies only for LLC. Claim the full $2,500 AOTC for your daughter. The LLC provides limited additional benefit because its $2,000 maximum must cover all remaining students.
Common Scenarios Illustrating 1098-T Entry
Scenario 1: Undergraduate with Partial Scholarship
| Situation | Financial Impact |
|---|---|
| Fall 2025 tuition billed in July 2025 at $6,500 | Student pays $6,500 to school in July 2025 |
| Spring 2026 tuition billed in November 2025 at $6,500 | Student pays $6,500 to school in December 2025 |
| Merit scholarship of $4,000 awarded for academic year | School applies $2,000 to fall semester and $2,000 to spring semester |
| Required textbooks purchased outside school at $850 | Student pays $850 to various retailers from August-December 2025 |
| Form 1098-T Box 1 shows $13,000 | Box 1 includes both fall and spring payments received in 2025 |
| Form 1098-T Box 5 shows $4,000 | Box 5 includes both fall and spring scholarship portions |
| Box 7 is checked | Box 7 checked because Box 1 includes December payment for spring 2026 |
| Calculation of qualified expenses | $13,000 (Box 1) + $850 (books) – $4,000 (Box 5) = $9,850 |
| American Opportunity Tax Credit calculation | 100% of first $2,000 = $2,000; 25% of next $2,000 = $500; Total = $2,500 |
| Student receives maximum AOTC | Student qualifies for full $2,500 credit with $9,850 in qualified expenses |
In this scenario, the student attends school half-time or more, pursues an undergraduate degree, has not completed four years of postsecondary education, and has no felony drug convictions. The student or parent enters the Form 1098-T information into TaxSlayer following the navigation path to Education Credits. They add $850 for required books purchased outside the school. TaxSlayer calculates the maximum $2,500 AOTC. Because Box 7 is checked, TaxSlayer confirms the spring 2026 payment can be claimed on the 2025 return.
Scenario 2: Graduate Student with Teaching Assistantship
| Situation | Financial Impact |
|---|---|
| Fall 2025 graduate tuition at $8,500 | School bills $8,500 for fall semester |
| Spring 2026 graduate tuition at $8,500 | School bills $8,500 for spring semester |
| Teaching assistantship tuition waiver for fall at $8,500 | School applies $8,500 waiver reducing fall balance to $0 |
| Teaching assistantship tuition waiver for spring at $8,500 | School applies $8,500 waiver reducing spring balance to $0 |
| Student pays mandatory fees of $600 fall and $600 spring | Student pays total $1,200 in mandatory fees during 2025 |
| Form 1098-T Box 1 shows $1,200 | Box 1 shows only mandatory fees paid, not waived tuition |
| Form 1098-T Box 5 shows $0 | Tuition waivers from assistantships do not appear in Box 5 |
| Box 9 is checked | Graduate student status indicated |
| Student ineligible for AOTC due to graduate status | Cannot claim AOTC regardless of expenses |
| Lifetime Learning Credit calculation | 20% of $1,200 = $240 |
| Student receives $240 LLC | Limited credit due to small qualified expense amount |
This scenario illustrates how teaching assistantships affect Form 1098-T reporting. Tuition waivers from teaching or research assistant positions do not appear in Box 5 because they are not classified as scholarships or grants. The student paid only mandatory fees, creating a small qualifying expense base. Graduate student status automatically excludes the student from AOTC eligibility, leaving only the LLC option. The student enters this information in TaxSlayer, which recognizes the Box 9 checkmark and calculates only the LLC.
Scenario 3: Dependent Student with Generous Financial Aid
| Situation | Financial Impact |
|---|---|
| Dependent student’s annual tuition at $15,000 | School charges $15,000 for full academic year |
| Federal Pell Grant of $7,000 | Grant pays $7,000 toward tuition |
| State grant of $4,000 | Grant pays $4,000 toward tuition |
| University scholarship of $5,500 | Scholarship pays $5,500 toward tuition |
| Total grants and scholarships equal $16,500 | Financial aid exceeds tuition charges |
| Parents pay $0 to school for tuition | No out-of-pocket tuition payments required |
| Form 1098-T Box 1 shows $16,500 | Box 1 shows total payments received including financial aid |
| Form 1098-T Box 5 shows $16,500 | Box 5 shows total scholarships and grants |
| Student purchased $400 in required textbooks | Student paid for books not covered by financial aid |
| Net qualified expenses calculation | $16,500 (Box 1) + $400 (books) – $16,500 (Box 5) = $400 |
| American Opportunity Tax Credit calculation | 100% of $400 = $400 |
| Parents claim $400 AOTC on their return | Parents report student as dependent and claim limited credit |
This scenario demonstrates what happens when scholarships and grants exceed tuition charges. Box 1 and Box 5 show identical amounts because financial aid covered all billed charges. The student might actually receive a refund from the school when financial aid exceeds charges. The $400 in textbook purchases creates the only qualifying expenses for credit purposes. While the credit seems small, it still provides valuable tax relief. Parents claiming their dependent student complete the TaxSlayer education credit section, entering all Form 1098-T information and adding the $400 textbook expenses.
Mistakes to Avoid When Entering Form 1098-T
Failing to Add Required Books and Supplies
Many taxpayers enter only the Box 1 amount without adding qualifying books and supplies purchased outside the school. This mistake costs hundreds or thousands of dollars in unused education credits. A student spending $800 on required textbooks and lab materials loses up to $200 in AOTC value by omitting these expenses.
Required course materials qualify for the AOTC even when purchased from third-party vendors. Your syllabus lists specific textbooks, lab kits, art supplies, or equipment you must obtain for the class. These items meet the IRS definition of required course materials whether you buy them from the campus bookstore, Amazon, or a specialty retailer.
The negative outcome of this mistake means you pay more tax than necessary. The IRS does not automatically give you credit for expenses you do not claim. An audit later will not correct this omission in your favor because you could have claimed the expenses originally but chose not to. You forfeit the benefit permanently for that tax year.
Claiming the Same Expenses for Multiple Tax Benefits
Some taxpayers attempt to claim the same educational expenses for both a 529 plan withdrawal and an education tax credit. IRS regulations prohibit this double dipping. You cannot use the same dollar of expenses to justify both tax-free 529 withdrawals and education tax credits.
If you withdraw $10,000 from a 529 plan to pay qualified expenses, you must reduce your education credit expenses by that $10,000. The 529 plan already provided a tax benefit through tax-free growth and withdrawals. Claiming a credit on the same expenses constitutes claiming two benefits for one expense.
The consequence of this mistake includes potential tax on the 529 withdrawal. When your education credits exceed your actual out-of-pocket expenses after accounting for 529 money, the IRS treats part of your 529 withdrawal as nonqualified. Nonqualified 529 withdrawals trigger income tax on the earnings portion plus a 10 percent penalty on those earnings.
Entering the Wrong Student Social Security Number
Form 1098-T displays the student’s Social Security Number in the top section. You must enter this exact number in TaxSlayer when claiming education credits. Transposed digits, typos, or using a parent’s SSN instead of the student’s SSN creates mismatches in IRS systems.
The IRS matches Form 1098-T information with your tax return. When the SSN you enter does not match the SSN on the Form 1098-T the school filed, the IRS system flags a discrepancy. This flag can delay your refund for months while the IRS requests additional documentation. You must prove the student’s identity and your relationship to the student.
The negative outcome extends to potential credit denial. If you cannot adequately prove which student attended which school and incurred which expenses, the IRS may disallow your entire education credit. You lose the credit and must repay any refund generated by the credit, plus interest and potential penalties.
Claiming AOTC for More Than Four Years
The American Opportunity Tax Credit allows only four years of claims per student. Some families lose track of how many years they have claimed the credit. They claim a fifth year and trigger IRS rejection of the credit.
Form 8863 includes a specific question asking how many years you have claimed AOTC for this student. Answer honestly and accurately. Include any years you claimed the predecessor Hope Credit for the same student. If you claimed AOTC in 2021, 2022, 2023, and 2024, you have exhausted eligibility. Claiming again in 2025 violates the four-year limit.
The consequence includes credit denial and potential ban from claiming AOTC for two to ten years. The IRS treats excessive claims as reckless disregard for the rules. Beyond repaying the improper credit with interest, you face penalties. More seriously, the ban prevents you from claiming AOTC for other students in your family during the ban period.
Ignoring Box 4 and Box 6 Adjustments
Boxes 4 and 6 report adjustments to prior year amounts. When these boxes contain figures, you must address them on your current year return or amend your prior year return. Simply ignoring the adjustments creates tax liability you fail to pay.
Box 4 shows your prior year qualified expenses were overstated. Perhaps you received a tuition refund after the school issued your Form 1098-T. The credit you claimed on your prior return exceeded the credit you actually earned. You must recapture part of the credit by reporting additional tax on your current return.
The negative outcome of ignoring these adjustments includes IRS notices demanding payment of the excess credit you received, plus interest from the date your prior year return was due. If the adjustment is substantial, you may owe hundreds or thousands of dollars unexpectedly. Prompt attention to Box 4 and Box 6 figures prevents surprise tax bills.
Claiming Credits When Married Filing Separately
Married taxpayers who file separate returns cannot claim education credits. This absolute prohibition appears in IRS regulations governing both the AOTC and the LLC. No exception exists regardless of the circumstances prompting the separate filing decision.
Some couples file separately for strategic reasons like income-based student loan repayment calculations or to avoid liability for a spouse’s tax issues. While these reasons may be valid, the decision costs education tax credits. You must weigh the benefit of filing separately against the loss of potentially thousands of dollars in education credits.
The negative outcome means you forfeit valuable tax benefits. A couple giving up a $2,500 AOTC and filing separately when they would owe less tax filing jointly makes an expensive choice. Run the calculations both ways before finalizing your filing status decision.
Claiming Credits as a Dependent
Students whom another taxpayer can claim as a dependent cannot claim education credits on their own returns. The person claiming the student as a dependent holds the exclusive right to claim education credits for that student’s expenses. This rule applies even when the student files their own return for refund of withheld taxes.
Your parents can claim you as a dependent because you are a full-time student under age 24 and they provide more than half your support. You cannot claim education credits for your own tuition payments on your tax return. Your parents must claim the credits on their return, even if you paid the expenses from your earnings or student loans.
The negative outcome of violating this rule includes denied credits and potential penalties for improper claims. The IRS receives Form 1098-T showing your SSN. When both you and your parents claim credits using the same Form 1098-T, the system identifies the duplication. Both returns get flagged for examination, causing processing delays and requiring documentation to resolve the conflict.
Do’s and Don’ts for Form 1098-T Entry
Do’s
Do gather all required documentation before starting your TaxSlayer entry. Collect your Form 1098-T, receipts for required books and supplies, records of scholarship or grant money not shown on Form 1098-T, and verification of enrollment status. Having complete documentation prevents errors and speeds your data entry process. Missing documents force you to stop mid-entry and search for information, increasing the risk of mistakes. Complete preparation protects against errors that reduce your credits or trigger IRS inquiries.
Do verify your school’s Employer Identification Number exactly matches Form 1098-T. Type each digit carefully when entering the EIN in TaxSlayer. A single wrong digit creates mismatches that prevent electronic filing and potentially disqualify you from the American Opportunity Tax Credit. The EIN serves as a critical verification point linking your claimed expenses to the institution’s reporting. Accurate EIN entry ensures smooth processing and prevents administrative complications.
Do calculate whether AOTC or LLC provides greater benefit when you qualify for both. TaxSlayer automatically performs this calculation, but understanding the comparison helps you verify the result. The AOTC offers up to $2,500 per student while the LLC offers up to $2,000 per return. The AOTC includes partial refundability while the LLC is entirely nonrefundable. Graduate students qualify only for LLC regardless of which credit provides greater value. Making informed choices protects your financial interests.
Do keep copies of all documentation for at least three years after filing. The IRS can audit your return and request substantiation for claimed education credits. Save your Form 1098-T, textbook receipts, enrollment verification, and records showing you or someone on your behalf paid the expenses. Organized records demonstrate compliance with IRS requirements. Missing documentation during an audit can result in denied credits, repayment obligations, interest charges, and accuracy penalties.
Do coordinate with other family members about who will claim the dependent and the education credits. When parents provide more than half a student’s support, the parents typically claim the student as a dependent. The parents then hold the exclusive right to claim education credits for that student. The student cannot claim the credits even if the student paid the expenses. Clear family communication prevents both parties from claiming the same credits and triggering IRS conflicts that delay refunds and require correction.
Don’ts
Don’t assume Form 1098-T includes all qualifying expenses. The form reports only payments the school received for tuition and mandatory fees. Required textbooks purchased from Amazon do not appear. Required lab equipment purchased from a scientific supply company does not appear. Required course materials purchased from any third-party vendor do not appear. You must manually add these qualifying expenses to maximize your education credits. Failing to add external purchases costs you valuable credit dollars.
Don’t claim education credits if someone else can claim you as a dependent even if they choose not to. The IRS rule examines whether another taxpayer can claim you as a dependent, not whether they actually do claim you. If your parents can claim you as a dependent under support and age rules, you cannot claim education credits even if your parents decide not to claim you. This nuanced distinction affects many students who provide some of their own support but not more than half.
Don’t overlook the partially refundable nature of AOTC when you have low income. Even students or families owing little or no federal tax can benefit from AOTC because 40 percent is refundable. A student earning $12,000 annually from part-time work might owe zero federal income tax after the standard deduction. That student can still receive up to $1,000 in refundable AOTC, providing funds to help pay future education expenses or living costs. Understanding refundability prevents low-income students from incorrectly assuming education credits offer them no benefit.
Don’t use married filing separately status without calculating the cost of lost education credits. Married couples who file separate returns forfeit all education credits regardless of income or expenses. Before selecting married filing separately, calculate your total tax liability using both filing statuses. Include the loss of education credits in your comparison. The separate filing status might cost thousands of dollars in lost credits. Some couples find joint filing produces better overall tax results even when separate filing seems advantageous for other reasons.
Don’t claim expenses paid with tax-free educational assistance like employer tuition reimbursement. When your employer pays tuition directly to your school or reimburses you under a qualified educational assistance program, those payments represent tax-free benefits under Section 127. You cannot claim education credits for expenses paid with tax-free money. The IRS prohibits double benefits—you already received a tax benefit through the exclusion from income. You must reduce your qualifying expenses by employer educational assistance amounts before calculating credits.
Pros and Cons of Education Tax Credits
Pros
Credits reduce your tax liability dollar-for-dollar rather than merely reducing taxable income. A $2,500 education credit cuts your tax bill by $2,500 directly. Compare this to a $2,500 deduction, which reduces taxable income by $2,500. At a 22 percent tax bracket, the deduction saves only $550 in taxes. Credits provide far more valuable tax relief than deductions, making them among the most powerful tax benefits available to students and families. The direct reduction creates substantial savings that help offset the high cost of higher education.
The AOTC’s partial refundability helps students with limited income. Lower-income students working part-time and attending school might owe little or no federal income tax. The 40 percent refundable portion of the AOTC allows these students to receive up to $1,000 even with zero tax liability. This feature ensures education tax benefits reach those who need financial help most. Students from families earning modest incomes gain meaningful assistance through refundable credits that would provide no benefit if entirely nonrefundable.
Credits can be claimed for up to four years under AOTC plus unlimited additional years under LLC. A student who claims the maximum AOTC for freshman through senior years receives $10,000 in total credits over four years. The student then remains eligible for LLC during graduate school or when taking continuing education courses years later. The combined availability of both credits across multiple life stages supports educational advancement from initial undergraduate enrollment through professional development decades later. Lifelong learning receives ongoing tax support through this structure.
Required course materials purchased outside the school qualify for AOTC. Students save money by purchasing textbooks from third-party sellers rather than campus bookstores. Amazon, Chegg, and other vendors often offer significantly lower prices. The AOTC allows these savings while still qualifying the purchases for credit purposes. You gain both the cost savings from shopping around and the tax credit benefit. This flexibility recognizes modern purchasing patterns and prevents students from being forced to buy from higher-priced campus sources to qualify for credits.
TaxSlayer’s interview format guides you through proper reporting systematically. The software asks specific questions about student status, enrollment level, degree pursuit, and expense amounts. Each question builds toward proper credit calculation without requiring you to understand complex tax code provisions. The guided approach reduces errors compared to manually completing Form 8863. Users who answer questions accurately receive correct credit calculations automatically, protecting them from underclaiming credits they have earned or overclaiming credits that trigger IRS scrutiny.
Cons
Education credits phase out for higher-income taxpayers. Single filers earning over $90,000 and married couples earning over $180,000 receive no education credits regardless of qualifying expenses. These income limits exclude many upper-middle-class families from claiming credits even though they bear substantial education costs. A family earning $190,000 jointly might pay $30,000 annually in college expenses but receive no tax relief through education credits. The phase-out creates a cliff effect where modest income increases eliminate thousands of dollars in tax benefits.
The LLC’s nonrefundable nature limits benefits for lower-income taxpayers. A student who owes $500 in federal taxes can use only $500 of the LLC. The remaining $1,500 of potential credit provides no benefit because nonrefundable credits cannot reduce tax below zero or create refunds. Lower-income students who would benefit most from financial assistance receive the least benefit from LLC. This structural limitation makes the LLC less progressive than the partially refundable AOTC.
You cannot claim education credits if you file married filing separately. This absolute prohibition affects couples who file separately for strategic reasons like income-driven student loan repayment calculations, separation of finances during marital difficulties, or protection from a spouse’s tax issues. The rule treats married filing separately unfavorably across numerous tax benefits. Couples must choose between filing separately for other financial reasons and claiming education credits. The choice often costs thousands of dollars regardless of which option they select.
Form 1098-T sometimes contains errors requiring correction or substantiation. Schools occasionally report incorrect amounts in Box 1 or Box 5. Scholarships may be omitted or recorded in the wrong calendar year. Billing adjustments may not be properly reflected. Students must review their Form 1098-T carefully and contact the school when discrepancies appear. Correcting errors takes time and effort. Students must maintain personal records of all payments and scholarships to verify Form 1098-T accuracy. Dependence on potentially inaccurate institutional reporting creates administrative burdens.
The four-year AOTC limit does not accommodate students who take longer to complete degrees. Many students require five or six years to complete bachelor’s degrees due to major changes, part-time enrollment while working, or academic challenges. Students taking five years can claim AOTC for only four of those years. The fifth year’s expenses receive only the less generous LLC benefit. This limitation particularly affects first-generation college students and working-class students who must work substantial hours to support themselves while attending school. The rigid four-year limit fails to match modern undergraduate completion patterns.
State Tax Implications
Federal and State Coordination
Most states use your federal Adjusted Gross Income as the starting point for state tax calculations. When you claim federal education credits, those credits reduce your federal tax but do not directly affect your state return. California does not provide state education tax credits corresponding to the federal AOTC or LLC. You report your federal AGI on California Form 540, then make California-specific adjustments.
TaxSlayer handles state return preparation after you complete your federal return. The program transfers information from your federal return to your state return automatically. You do not reenter your Form 1098-T information on the state return. The state calculation uses your federal AGI and makes adjustments according to state tax law.
Some states conform to federal tax treatment of scholarships and grants. Others follow different rules. States may tax scholarship amounts that exceed qualified tuition and fees even when federal law treats those excess amounts as tax-free. When Box 5 on your Form 1098-T exceeds Box 1, indicating scholarships covered tuition plus provided additional funds for room and board, state tax treatment may differ from federal treatment.
State-Specific Considerations
New York offers a limited education tax credit through its state return separate from federal credits. The credit equals a small percentage of college tuition expenses. TaxSlayer guides New York residents through claiming the state credit after completing federal education credit calculations. The state credit provides modest additional tax relief beyond federal benefits.
Pennsylvania does not offer state-level education tax credits. Pennsylvania residents claiming federal education credits receive no corresponding state benefit. The lack of state credits means Pennsylvania families rely entirely on federal tax relief to offset education costs.
Several states offer 529 plan tax deductions for contributions to state-sponsored college savings plans. These deductions provide state tax benefits separate from education tax credits. You can contribute to a 529 plan, claim a state deduction for the contribution, then later use the plan to pay education expenses while also claiming federal education credits for out-of-pocket expenses not covered by the 529 plan. The deduction and the credits represent separate tax benefits that can be layered strategically.
Frequently Asked Questions
Can I claim education credits if my school did not send Form 1098-T?
Yes. You can still claim credits if you can demonstrate the student attended an eligible educational institution and substantiate payment of qualified expenses through receipts, bank statements, or school billing records.
Do scholarships reduce my education credit?
Yes. Tax-free scholarships and grants reduce your qualified education expenses dollar-for-dollar, which decreases your education credit calculation by the scholarship amount reported in Box 5.
Can parents claim credits if the student pays tuition?
Yes. When parents claim the student as a dependent, they may claim education credits even when the student paid expenses from personal funds or student loans.
Does Box 5 exceeding Box 1 mean taxable income?
Yes. When scholarships exceed qualified expenses, the excess may constitute taxable income that the student must report, depending on scholarship terms and expense allocation.
Can I claim both AOTC and LLC on one return?
Yes. You can claim AOTC for one student and LLC for another student on the same tax return, but not both credits for one student.
Do student loans count as scholarships in Box 5?
No. Student loan proceeds do not appear in Box 5 and do not reduce your qualified expenses because loans represent borrowed money requiring repayment.
Does Box 7 being checked affect my credit amount?
No. Box 7 merely indicates when the academic period begins; it does not change credit calculations if you paid expenses in the current year.
Can graduate students claim American Opportunity Credit?
No. Graduate students cannot claim AOTC under any circumstances; they may claim only the Lifetime Learning Credit if they meet other requirements.
Must I attach Form 1098-T to my return?
No. You enter information from Form 1098-T into your return, but do not attach the physical form when e-filing through TaxSlayer.
What happens if I exceed AOTC four-year limit?
No. The IRS will deny your credit, require repayment with interest, and may ban you from claiming AOTC for two to ten years.
Do online course expenses qualify for credits?
Yes. Courses at eligible institutions qualify regardless of delivery method if they meet enrollment and degree pursuit requirements.
Can room and board expenses qualify?
No. Room and board never qualify as education expenses for AOTC or LLC purposes, regardless of where you live or payment method.
Does the school determine half-time status?
Yes. Each eligible institution defines half-time enrollment according to its academic standards, typically six credits per semester for traditional colleges.
Can I claim credits if I attend school abroad?
Yes. Many foreign universities participate in federal student aid programs and qualify as eligible institutions; check the Department of Education’s database.
What if Box 1 and my records differ?
No. You may use your documented records and explain the discrepancy; maintain receipts and billing statements proving actual expenses paid.
Do parking or transportation costs qualify?
No. These expenses never qualify for education credits regardless of whether the school requires them or charges them directly.
Can I claim the credit for my spouse?
Yes. You may claim education credits for qualified expenses paid for your spouse if you file jointly and meet other requirements.
What if I received Form 1098-T after filing?
Yes. You can file an amended return using Form 1040-X to claim education credits you omitted due to delayed Form 1098-T receipt.
Does military tuition assistance reduce qualified expenses?
Yes. Military education benefits represent tax-free assistance that reduces your qualified expenses similar to scholarships and grants.
Can I claim credits for high school courses?
No. Credits apply only to postsecondary education at eligible colleges, universities, vocational schools, or other institutions eligible for federal student aid.
Related reading
- Who Really Claims 1099-Q on Taxes? Avoid this Mistake + FAQs
- When are 1099-Q Distributions Taxable? Avoid this Mistake + FAQs
- Who Qualifies for the American Opportunity Tax Credit? + FAQs
- Why Do I Lose the AOTC When My Scholarships Exceed Tuition? + FAQs
- Are Financial Aid Refunds Taxable? (w/Examples) + FAQs
- How to Fill Out IRS Form 8815 (w/Examples) + FAQs
- How to Fill Out IRS Form 8300 (w/Examples) + FAQs