Income Tax Credit Form 1098T
Please contact the IRS directly or your tax advisor to determine if you qualify for an educational credit.
At the end of January, Saint Mary's College of California is required to provide students with IRS Form 1098T for the prior calendar year. This form is used by the taxpayer in the computation of any eligible tax credit. The forms are mailed to U.S. citizens or permanent residents attending classes at SMC and for whom reportable transactions (qualified tuition and related expenses) are reported for calendar year 2023. All forms are mailed to the student's address on file. An electronic form is available for review and printing through the student's GaelXpress account.
Please Note: This form is informational and serves to alert students that they MAY be eligible for federal income tax education credits. The 1098T is NOT meant to be an indicator of income. It is not required to be submitted with your tax return. Furthermore, receipt of the Federal 1098T form does NOT indicate eligibility for the tax credit. It contains information to assist the IRS (and you) in determining if you are eligible to claim education related tax credits. Your personal financial records serve as official supporting documents for your federal income tax return. The information on the Federal 1098T form is only provided to assist you. Please consult with your tax preparer if you have additional questions regarding how the 1098T relates to your specific tax preparation.
Until recently, the Internal Revenue Service (IRS) permitted colleges and universities to report qualified tuition and related expenses (QTRE) in Box 2 and leave Box 1 (payments received) blank. All 1098T’s received from Saint Mary’s College (up to tax year 2018) have followed this method, showing amounts billed during the calendar year, rather than amounts paid. While we reported amounts billed to you, you were always restricted to the amounts paid (per your records) against those expenditures.
Beginning with the 1098T form for calendar year ending December 31, 2018, the College is now required to report amounts paid during the calendar year for qualified tuition and expenditures. This change means that you will no longer see amounts billed but instead, payments made. While this change will make your form look different, it is important to remember that the tax credit was always based on payments made during the applicable calendar year, and so the calculation of the credit should be the same.
What this means to you is the amount reported in Box 1 will include payments made by you during the calendar year (i.e. it will not include your spring 2023 payments if they were paid in December 2022 and may or may not include your spring 2024 payment, depending on the timing of your payment). Also reflected in Box 1 will be other forms of payment, such as scholarships and grants.
Scholarships and grants will continue to be reported in Box 5 as in past years.
PLEASE NOTE: SMC employees are NOT professional tax advisors and CANNOT give tax advice. We are prohibited from providing legal, tax, or accounting advice and we are not responsible for any use you make of this information.
Please contact a personal tax advisor for assistance. You may also contact the IRS directly at www.irs.gov or (800) 829-3676 / (800) 829-1040 and refer to IRS Publication 970 Tax Benefits for Higher Education.
Frequently asked questions regarding my 1098T Statement:
What constitutes qualified Tuition and Related Expenditure (QTRE)?
Qualified Tuition and Related Expense is tuition and fees required for the enrollment or attendance of a student for courses of instruction. QTRE’s do not include the cost of food and housing, medical insurance, transportation or personal expenses.
What does the 1098T report?
Most students will see two boxes populated on their 1098T, box 1 and box 5. Some students may also have amounts in box 4 or box 6 for adjustments related to prior calendar years. All transactions reported on the 1098T reflect activity within the calendar year, regardless of the year or term that the transactions affected.
***For example, Spring 2023 was billed in December of 2022. While payments for the Spring 2023 may have been received in early 2023, the amount available for qualified tuition and fees will not be included. This may be offset by the billing of Spring, but for those graduating or new arrivals, this may create confusion around the amount reported in box 1.
Please consult your tax advisor regarding how to best handle these nuances.
How come I did not receive a 1098T?
If you did not received a 1098T:
- There are no qualified charges in the calendar tax year.
- You were not enrolled during calendar year 2023 and do not have a "carryover" amount.
- You are a non-degree seeking student without payments in 2023.
- You have not submitted your Social Security number as requested.
- You are a non-resident student and have not submitted an ITIN or Social Security number
- The amount in Box 5 exceeds the amount in Box 1.
How to read the 1098T:
Box 1 (Payments Received for Qualified Tuition) will report payments made toward Qualified Tuition and Expenditures (and/or carryover amounts) billed during the calendar year.
Box 2: This box will be left blank. The IRS has determined that institutions may no longer report amounts billed in box 2.
Box 4 (Adjustments for Qualified Tuition from a Prior Period): Any changes to a prior tax year that resulted in a reduction of payments toward previously reported qualified tuition are reported in box 4.
Box 5 (Scholarships and Grants Received): Box 5 reports the amount of all scholarships and grants disbursed during a calendar year. This amount may exceed the value in box 1.
Box 6 (Adjustments to Scholarships and Grants reported in a Prior Year): Similarly to box 4, this box reflects retro-active changes to previously reported amounts on your prior 1098T forms.
Saint Mary’s College of California is unable to offer any tax guidance. We strongly recommend consulting a tax advisor. The following IRS links may also be helpful to you regarding education credits:
IRS Publication 970, Tax Benefits for Education (https://www.irs.gov/forms-pubs/about-publication-970)
Tax Benefits for Education:Info Center (https://www.irs.gov/newsroom/tax-benefits-for-education-information-center)
Education Credits (https://www.irs.gov/help/ita/am-i-eligible-to-claim-an-education-credit)
American Opportunity Tax Credit (https://www.irs.gov/credits-deductions/individuals/aotc)
Lifetime Learning Credit (https://www.irs.gov/credits-deductions/individuals/llc)