Explanation of IRS Boxes Form 1098-T

The IRS Form 1098-T is an information form filed with the Internal Revenue Service (IRS).

• The IRS Form 1098-T that you received reports amounts paid for Qualified Tuition and Related Expenses, as well as other related information.
• You, or the person who may claim you as a dependent, may be able to take either the tuition and fees deduction or claim an education credit on Form 1040 or 1040A for the qualified tuition and related expenses that were actually paid during the calendar year.
• There is no need to attach Form 1098-T to your tax return.
• All information and assistance that Montclair State University (MSU) can provide to you is contained in this notice.
• There is no IRS requirement that you must claim the tuition and fees deduction or an education credit. Claiming education tax benefits is a voluntary decision for those who may qualify.

Due to federally mandated tax reporting requirements effective for calendar year 2018, MSU will now report all payments for qualified tuition and related expenses in Box 1. Please note this is different from prior years where only “billed” information for qualified tuition and related expenses was reported in Box 2.

Amounts Paid for Qualified Tuition and Related Expenses

Box 1 of Form 1098-T reports the qualified tuition and related expenses paid during the calendar year. Qualified tuition and related expenses are sometimes referred to as qualified education expenses, although the terms are not always interchangeable. For purposes of the Form 1098-T provided by Montclair State University, the following categories of charges are included or not included in qualified tuition and related expense

Box 2: Not used.

Box 3: Not used.

Adjustments Made For a Prior Year

Box 4 of Form 1098-T reports adjustments made to qualified tuition and related expenses reported on a prior year Form 1098-T in Box 1. The amount reported in Box 4 represents a reduction in tuition paid during a prior calendar year. For example, if you paid Spring semester classes in December and withdrew from classes in January which resulted in a refund, Box 4 reports the decrease in paid tuition due to the withdrawal. The amount reported in Box 4 for adjustments to qualified tuition and related expenses may reduce any allowable education credit you may claim for the prior year. See IRS Form 8863 or IRS Publication 970 for more information.

Scholarships or Grants

Box 5: Scholarships or grants – This box shows the net amount of certain forms of educational assistance that were received or applied to your student account during the most recent calendar year, regardless of the quarter for which the funds originally were intended. Scholarships and grants may be paid directly to the student or may be in the form of direct tuition reductions. We like to think of this category as “free money” that does not need to be paid back.

• Emergency financial aid grants under the Cares Act for unexpected expenses, unmet financial need, or expenses related to the disruption of campus operations on account of the COVID-19 pandemic, are qualified as disaster relief payments under section 139 of the Internal Revenue Code. This grant is not included in Box 5.
• Grants and scholarships
• Fellowships, traineeships, and stipends
• Outside sponsored awards
• Third party billing arrangements
• Waivers and exemptions

The amount reported in Box 5 does not include:

• Student loans, for example subsidized, unsubsidized, PLUS, Perkins, and alternative loans.
• Work-study.

Adjustments to Scholarships or Grants For a Prior Year

Box 6 of Form 1098-T reports adjustments made to scholarships or grants reported on a prior year Form 1098-T in Box 5. The amount reported in Box 6 represents a reduction in scholarships or grants reported for a prior calendar year. The amount reported in Box 6 for adjustments to scholarships or grants may affect the amount of any allowable tuition and fees deduction or education credit you may claim for the prior year. See IRS Form 8863 for how to report these amounts.

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

Box 8 shows whether you are considered to be carrying at least one-half the normal full-time workload for your course of study at ASU for at least one academic period during the calendar year. If this box is marked, you meet one of the requirements for the Hope tax credit. You do not have to meet the workload requirement to qualify for the tuition and fee deduction or the lifetime learning credit.

Box 9 shows whether you are considered to be enrolled in a program leading to a graduate degree, graduate-level certificate, or other recognized graduate-level educational credential. If you are enrolled in a graduate program, you are not eligible for the American Opportunity credit, but you may qualify for the tuition and fee deduction or the lifetime learning credit.

Attaching Form 1098-T to Your Tax Return
You are not required to attach IRS Form 1098-T to your tax return. The IRS Form 1098-T is not like the IRS Form W-2 obtained from your employer, which is required to be attached to the tax return filed with the IRS. The primary purpose of the IRS Form 1098-T is to let you know that ASU has provided required information to the IRS to assist them in determining who may be eligible to claim the tuition and fee deduction or an education credit.

If Your 1098-T is Incorrect
The Social Security Number and address on Form 1098-T were obtained from information provided to MSU, although the address shown on Form 1098-T is irrelevant for IRS income tax filing purposes. The single most important information on the form is your Social Security Number. Your Social Security Number must be correct. To amend your SSN on your tax form with MSU, you must complete the Request for Change of Name and/or Student ID Number and submit it to the Registrar’s Office at Montclair State University.

Box 6: This is for adjustments to scholarships and grants that were granted anytime prior to the most recent calendar year.

Box 7: If this box is checked, then “payments received” in Box 1 includes “pre-paid fees”. “Pre-paid” fees are those Qualified Tuition and Related Expenses paid during the most recent calendar year for the academic quarter that begins in the next year. It is common for a student to register, be billed, and pay tuition for Winter quarter (Jan – Mar) in November or December of the previous year.

Box 8: If this box is checked, then the student has enrolled at least half time for at least one quarter during the most recent calendar year.

Box 9: If this box is checked, then the student is a graduate student or in a credential program.