Frequently Asked Questions
Educational Tax Benefits
Go To 1098-T FAQs
What is the difference between a tax credit and a tax deduction?
A tax credit directly reduces the amount of federal tax. A tax deduction is subtracted before calculating taxable income.
What is the Hope Scholarship Credit?
It is a tax credit available to eligible students during the first two years of postsecondary education. The maximum credit for 2008 is $1,800 per student.
What is the Lifetime Learning Credit?
It is a tax credit available to eligible undergraduate, graduate, and postsecondary students, as well as any individuals taking continuing education courses or pursuing job related skills. The maximum for 2008 is $2000 per family.
Who can claim the credits?
You may claim the credit if all three requirements are met:
- You paid qualified education expenses for higher education
- You paid education expenses for an eligible student
- The eligible student is either yourself, spouse, dependent for whom you claim an exemption on your tax return
What expenses qualify for these education credits?
These expenses include tuition and related expenses required for enrollment at an eligible education institution. An eligible educational institution included most accredited colleges, universities, vocational schools, or other post-secondary educational institutions eligible to participate in student aid programs administered by the Department of Education.
Can I still claim the credit if I receive scholarships?
No, you can not claim a credit for tuition and required fees if paid for with a tax-free scholarship.
Are scholarships taxable?
Generally, scholarships and fellowships for tuition and related fees are not taxable. Scholarships and fellowships for room and board/living expenses are taxable. You should refer to Publication 970 for additional information.
If the amount of the tuition and required fees I paid is higher than my scholarship, can I take a credit for the difference?
Yes.
Can I claim these credits for tuition and required fees I paid with government subsidized loans?
Yes, they qualify if you must repay the loan. The credit is claimed in the calendar year in which the expenses are paid, not the year in which the loan is paid.
What are the requirements for the Hope Scholarship credit?
- 1st two years of undergraduate study (postsecondary) in an accredited higher education institution
- Enrolled in degree seeking program
- At least a ½ time student for one semester
- No felony drug convictions
- Must file joint income tax return if married
- Adjusted gross income limits and phaseout amounts
What are the requirements for the Lifetime learning credit?
- Undergraduate and Graduate education, as well as continuing education courses and courses to acquire or improve job skills
- Must file a joint income tax return if married
- Adjusted gross income limits and phaseout amounts
You should refer to Publication 970 for complete eligibility requirements.
How do I claim these credits?
You may claim these education credits on Form 8863, which must be attached to the federal tax form 1040 or 1040A. Refer to the instruction for Form 8863 for additional information.
What is the deduction for higher education expenses?
It is a deduction for tuition and required fees for both undergraduate and graduate studies. The maximum deduction for 2008 is $4000.
How do I claim the deduction?
The deduction is taken on federal Form 1040 or 1040A as an adjustment before Adjusted Gross Income. Refer to the instructions for additional information.
Can I take both a deduction and education credit for the same student in the same calendar year?
No.
What is the student loan interest deduction and what are the requirements for the deduction?
It is a deduction that you may qualify for if you paid interest during the calendar year if you used the student loan for educated-related expenses-tuition, fees, room, board, books, equipment, supplies, transportation, etc. If you paid more than $ 600, you should receive a Form 1098-E. You may deduct up to $2500 each year of interest you paid.
How do I claim the student loan deduction?
It is claimed on the federal tax return as an adjustment before adjusted net income. You also may not be claimed as a dependent on by another taxpayer. You must file a joint income tax return if married.
Refer to Form 1040 or 1040A instructions for additional information.
Where can I find additional information regarding all of these education benefits?
Refer to IRS Publication 970-Tax Benefits for Higher Education for further information.
Additional information may also be found at the IRS website: http://www.irs.gov/
Tax forms and publications may be ordered by calling the IRS at (800) 829-3676.
Questions may be directed to the IRS by calling (800) 829-1040.
1098-T Questions
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to Educational Tax Benefits FAQs
What is Form 1098-T?
MTU is required by IRS Section 1.65050S-1 to send Form 1098-T to students who were enrolled in courses for the calendar year and who had qualified tuition and required fees billed during the calendar year. The form is used to assist the IRS and students in determining eligibility for education-related benefits.
Will I receive a 1098-T form?
You should receive a 1098-T form if you were enrolled in courses for the calendar year, had qualified tuition and required fees billed more than scholarships administered, and are not a nonresident alien.
When is the 1098-T mailed and to what address?
The 1098-T will be mailed to the student’s current permanent address in our computer system by January 31.
How do I change my address?
The current permanent mailing address may be changed in the BANWEB system.
I lost my 1098-T. How can I get another one?
The 1098-T may be printed from BANWEB system under Student Services with ISO user ID and password.
If I receive a 1098-T, does that mean I qualify for the Hope Scholarship, Lifetime Learning Credits, or other tax benefits?
Not necessarily. There are many eligibility requirements and restrictions with these education benefits. The tax benefits are based on the amount of eligible tuition and required fees paid during a particular calendar year out of your own pocket (loans count as out of pocket). MTU is unable to provide tax advice regarding how to use Form 1098-T when filing your tax return. You should consult your tax professional to determine whether you meet all the criteria for these benefits and the eligible amount. You may refer to IRS Publication 970 for additional information.
How do I determine which expenses will qualify?
You should consult your tax professional to determine the eligible expenses. You may refer to IRS Publication 970 for additional information.
Why does MTU show Box 2-Amounts Billed instead of Box 1-Payments?
The IRS requires colleges and universities to choose one reporting method-either amounts billed or amounts paid during the calendar year. We chose to report the “amounts billed” method. We report using this method every year.
How much did I pay in tuition and related fees for this calendar year?
We have provided information regarding your student account at the bottom of Form 1098-T. If additional detail is needed, you may obtain a printout of each relevant semester through BANWEB.
What if I didn’t receive a 1098-T?
There a four possible reasons:
- It may be that you did not have any billed eligible tuition and required fees for the calendar year. MTU bills for the Spring semester in November of the prior year. So if you were only enrolled Spring semester, you may not receive one. (ie-if you graduated at the end of the Spring semester, the amounts were actually billed in the prior November-so therefore, nothing was billed in this calendar year)
- it may have been mailed to an old address.
- you are a nonresident alien and therefore not eligible for the benefits
- you received grants, scholarships, etc which exceeded the amounts billed for eligible tuition and required fees, and therefore are not eligible
What if the information on my 1098-T is incorrect?
You may contact the Accounts Receivable department is the SSN is incorrect, or if other information is incorrect.
Can my parents be provided with any information reported in the 1098-T?
No. Due to federal regulations on privacy rights for individuals, the university is only authorized to provide 1098-T information to students.
Do I have to attach the 1098-T to my tax return?
No. The 1098-T is an information report. You should keep it with your other tax information, along with copies and receipts of charges and payments for each semester.
What information is sent to the IRS?
Colleges and universities are required to provide the IRS with the same information that is reported on your IRS Form 1098-T.
Why does MTU need my social security number?
MTU is required to file information regarding qualified tuition and required fees and scholarships on Form 1098-T, and the IRS requires us to furnish the SSN if available.
What if I do not want to give my social security number to MTU? Can I still claim the credit?
Without your SSN, MTU cannot properly report your qualified tuition and required fees to the IRS.
Where can I find additional information?
Refer to IRS Publication 970-Tax Benefits for Higher Education for further information about these topics
Additional information may also be found at the IRS website: http://www.irs.gov/
Tax forms and publications may be ordered by calling the IRS at (800) 829-3676.
Questions may be directed to the IRS by calling (800) 829-1040.
