Tax returns are an important component of the cadet accounting and financial aid process at colleges and universities. On this page, find guidance for navigating the critical 1098-T form needed for tax returns.

The IRS Form 1098-T, as required by the IRS, provides information that may assist students in completing individual tax returns.  Regardless of the information provided on the 1098-T, if you choose to claim an education tax credit, you should always keep documentation (invoices,  receipt of payment, etc.) that can be used to support any claimed tax credit even if you report only what is on IRS Form 1098-T.

• The IRS Form 1098-T is an information form filed with the Internal Revenue Service.
• The IRS Form 1098-T that you receive reports amounts paid for qualified tuition and related expenses, as well as other related information.
• You, or the person(s) who may claim you as a dependent, may be able to claim an education tax credit on IRS Form 1040 for the qualified tuition and related expenses that were actually paid during the calendar year.

Note: The information listed on IRS Form 1098-T may be different than the amount you actually paid towards Qualified Tuition and Related Expenses (QTRE). VMI, and its employees, may not (a) discuss tax implications or (b) provide advice. If you have questions about your specific circumstances as related to IRS forms, please reach out to a local tax professional.

 

Amounts Paid for Qualified Tuition and Related Expenses (QTRE)

Box 1 of IRS Form 1098-T reports the qualified tuition and related expenses (QTRE) paid during the calendar year.  Sometimes this is referred to as qualified education expenses, although the two are not always interchangeable.  You may wish to consult a tax professional for a more detailed explanation.

As per IRS Publication 970: "...the amount on Form 1098-T might be different from the amount you actually paid and are deemed to have paid. In addition, Form 1098-T should give you other information for that institution, such as adjustments made for prior years; the amount of scholarships or grants, reimbursements, or refunds; and whether the student was enrolled at least half-time or was a graduate student. The eligible educational institution may ask for a completed Form W-9S, Request for Student's or Borrower's Taxpayer Identification Number and Certification, or similar statement to obtain the student's name, address, and taxpayer identification number."

Virginia Military Institute has determined, following the limited guidance provided by the IRS, that the items below are either included or not included as part of QTRE:

SPECIAL NOTES:

1. The timing of payments may affect how they are included in 1098-T, such as scholarships that post after tuition is due. Consult a tax preparer regarding any questions for your specific circumstances.
2. Some or all of your study abroad charges may be classified as included. You may work with the Office of Global Education to secure an itemized list of the charges from your international program(s). That list should then be provided to the tax professional assisting you.

Adjustments Made for a Prior Year

Box 4 of IRS Form 1098-T reports adjustments made to qualified tuition and related expenses calculated in a prior year.  For example, if you were billed in December for the following spring, and later had a reduction in the QTRE charges for circumstances such as a dropped course or withdrawal, Box 4 reports the decrease in billed tuition. The amount reported in Box 4 for adjustments to qualified tuition and related expenses may reduce any allowable education credit you may have claimed for the prior year. It is possible for the other boxes to be empty and only have a number in Box 4. Speak with a tax professional for guidance. 

Scholarships and / or Grants

Box 5 of IRS Form 1098-T reports the total of scholarships or grants administered or processed by Cadet Accounting and/or the Office of Financial Aid during the calendar year (NOT the academic year). 

The timing of each charge and scholarship is important regarding which year they are reported in. As with Box 4, Box 5 may be populated while Box 1 remains empty. A tax preparer can assist you with any questions.

The amount reported in Box 5 does NOT include:

• Tuition waivers provided during the calendar year.
• Student Loans
• Work Study
• Employment
• Scholarships, grants, reimbursements, or other types of sponsorships not administered by Cadet Accounting or the Office of Financial Aid

NOTE: Per IRS instruction, Veteran's Education Benefit amounts received are included in Box 5.

Adjustments to Scholarships or Grants For a Prior Year

Box 6 of IRS Form 1098-T reports adjustments made to scholarships or grants reported on a prior year Form 1098-T that was in Box 5.  The amount reported in may affect the amount of the education credit you may claim for the prior year.  See IRS Form 8863 for how to report these amounts.

Additional Reporting

Box 7 indicates, if checked, that Box 1 includes amounts for an academic period beginning in the next year. For example, if you registered and paid for the upcoming Spring Semester during November or December, this box will be marked.

VMI employees and offices are NOT allowed to discuss or provide guidance on how taxes may affect you. We encourage you to reach out to a tax professional for assistance, and review the IRS resources with more information:

Tax Benefits for Education | Tax Info for Students | Scholarships, Fellowship Grants, and other Grants | Foreign Students