Form 1098-T Instructions: Filing Rules for Eligible Educational Institutions

Eligible colleges, universities, vocational schools, and other educational institutions use Form 1098-T to report tuition-related information for students. It would be incorrect to look at it as a student bill. Rather, it gives the IRS information about tuition payments, scholarships, adjustments from a previous year, and the student’s enrollment status.

An incorrectly filed Form 1098-T can cause confusion amongst students, increase corrections, and increase the risk of IRS notices.

This guide explains who must file, what each box means, which records institutions should keep, and when the form is due so that you can file accurately and with ease.

Why Form 1098-T Matters

Form 1098-T matters because students and parents often use it while reviewing education credits such as the American Opportunity Tax Credit and Lifetime Learning Credit. The institution does not decide the final education credit, but the form gives key reporting data that supports the tax review.

For the filer, the form supports compliance in several ways:

• Reportable student tracking: An eligible educational institution’s 1098-T process should identify each enrolled student with a reportable transaction unless an IRS exception applies.
• Payment accuracy: Box 1 only shows payments received and not billed amounts.
• Clarity in scholarships and grants: Scholarships and grants are reported as a separate category from tuition payments.
• Adjustment control: Tuition refunds and aid changes for a prior year must be shown in the correct box.
• Deadline readiness: Student statements must be furnished, and IRS filings must be submitted on time.

Form 1098-T Instructions: Box-by-Box Description

In general, an eligible educational institution files Form 1098-T for each enrolled student with a reportable transaction. Insurers also file the form for individuals who received refunds or reimbursements of qualified tuition and related expenses.

Usually, tuition, required enrollment fees, and any course materials students must have to enroll or attend are counted as “qualified expenses”. However, personal costs such as room and board, insurance, medical care, and transportation do not fall under that category.

Here is a box-by-box guide for institutions:

Box 1 – Payments Received for Qualified Tuition and Related Expenses

Form 1098-T Box 1 should include total payments received during the calendar year for qualified tuition and related expenses. This is based on payments received, not amounts billed.

Same-year refunds or reimbursements tied to those same-year payments reduce the amount reported in Box 1. However, scholarships & grants reported in Box 5 do not reduce Box 1.

Box 2 – Reserved

Box 2 is reserved for future use. Institutions should leave it blank and avoid entering internal billing figures or substitute values.

Box 3 – Reserved

Box 3 is also reserved. It has no current reporting function and should remain blank on the filed form and student statement.

Box 4 – Adjustments Made for a Prior Year

Use Box 4 for refunds, reimbursements, or reductions made during the current calendar year that relate to qualified tuition and related expenses from a prior-year Form 1098-T.

This box keeps prior-year changes separate from current-year payment activity.

Box 5 – Scholarships or Grants

Form 1098-T Box 5 should include scholarships and grants administered and processed by the institution during the calendar year for the student’s cost of attendance, including third-party payments treated as scholarships or grants.

These amounts are reported separately. Do not reduce Box 1 by Box 5.

Box 6 – Adjustments to Scholarships or Grants for a Prior Year

Use Box 6 when scholarships or grants reported in a prior year are reduced during the current year. This helps separate current-year aid from prior-year changes.

Box 7 – Checkbox for Future Academic Period

Check Box 7 when a Box 1 payment applies to an academic period that starts in the first three months of the next year.

For example, if a student pays in December for a February semester, Box 1 may include the payment, and Box 7 may need to be checked.

Box 8 – Check If At Least Half-Time Student

Check Box 8 if the student was at least half-time during any academic period that began in the reporting year, based on the institution’s workload standard and enrollment records.

Box 9 – Check If a Graduate Student

Box 9 should be checked if the student was enrolled in a program leading to a graduate-level certificate, graduate-level degree, or other recognized graduate credential.

Box 10 – Insurance Contract Reimbursements or Refunds

Box 10 is used by insurers to report money returned for qualified tuition and related expenses. Educational institutions do not use it unless they are filing in an insurer capacity.

TIN, W-9S, and Filing Controls

Institutions should maintain accurate records of student names, addresses, and TINs. Institutions may use Form W-9S or their own paper or electronic forms to collect the student’s name, address, and TIN.

Here are a few expert tips to maintain filing controls:

• Make sure to have collected student names, addresses, and TINs before year-end
• As documented TIN solicitations are mandatory, keep a record of written TIN solicitations made by December 31 when a student TIN is missing
• Always use the student’s permanent address if it is known
• Reconcile bursar, registrar, and financial aid data
• Keep proof of student statement delivery
• Before e-filing season, confirm that there is IRIS access and TCC readiness

Common Form 1098-T Errors That You’d Want to Avoid

A common cause of Form 1098-T errors is using billing reports without checking IRS box rules. Student account, enrollment, and financial aid records should be reconciled before forms are created.

Other common mistakes include:

• Using billed amounts instead of payments received in Box 1
• Reducing Box 1 by scholarships instead of reporting scholarships in Box 5
• Including non-qualified expenses such as room, board, insurance, or transportation
• Not applying IRS exceptions, such as noncredit courses, nonresident alien students unless requested, fully waived or scholarship-paid expenses, and certain formal billing arrangements
• Reporting prior-year refunds in the current-year Box 1 instead of Box 4
• Not remembering to fill in Box 6 when prior-year scholarships are reduced
• A lack of documentation of student TIN solicitations
• Checking Box 7, Box 8, or Box 9 without validating academic-period or enrollment records
• Filing on paper when electronic filing is required

Many corrections can be avoided with a pre-filing review. Institutions should verify student reportability and check student names and TINs against Form W-9S or other records. They should also match calendar-year payments and review scholarship records before reporting.

Real-Time Scenarios

How 1099Online Helps Institutions File Form 1098-T

With 1099Online, eligible educational institutions get to prepare and e-file Form 1098-T with less manual work. Institutions can enter student and payment details directly or upload multiple records at once, review each form, choose how recipient copies are delivered, and submit the forms securely to the IRS through IRIS.

The platform also helps student accounting teams track Copy B delivery, fix and resubmit rejected forms, and keep filing records in one place.

Conclusion

The main goal is to make sure each amount goes in the right box. Box 1 is for qualified tuition and related expenses, while Box 5 is for scholarships and grants. Any changes to amounts reported in an earlier year belong in Box 4 or Box 6, depending on whether they relate to tuition or scholarships. The enrollment boxes should only be checked when the school’s records support them.

Before filing, institutions should review student accounts, compare them with financial aid records, and confirm that TIN information has been requested and checked. They also need to catch any errors, send recipient statements, and submit the forms to the IRS. By bringing all of these steps together into one place, 1099Online makes year-end Form 1098-T filing much easier to manage.

FAQs

1. Who must file Form 1098-T?

Eligible colleges, universities, vocational schools, and other educational institutions generally file Form 1098-T for students who had reportable tuition activity during the year and usually includes those students who have made payments for qualified tuition and related expenses. However, the form may not be required if any specific IRS exception applies.

In some cases, an insurance company may also need to file Form 1098-T. This can happen when it refunds or reimburses a person for qualified tuition and related expenses.

2. Are billed amounts reported in Box 1?

No. Box 1 has payments received for qualified tuition and related expenses, not billed charges.

3. Do scholarships reduce Box 1?

No. Scholarships and grants are reported separately in Box 5. Neither of them reduces the amount reported in Box 1.

4. Is Form 1098-T required for noncredit courses?

No. Courses for which no academic credit is provided are covered by an IRS filing exception.

5. What does Box 7 mean on Form 1098-T?

Box 7 means a Box 1 payment relates to an academic period beginning in January, February, or March of the following year.

6. When is Form 1098-T due?

For 2026 Forms 1098-T, institutions must provide student copies by February 1, 2027. Paper forms filed with the IRS are due March 1, 2027, while electronically filed forms are due March 31, 2027.