IRS Reporting & Compliance
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Educational Tax Credits
The Taxpayer Relief Act of 1997 (TRA 97) provided new tax benefits for those individuals paying higher education costs for themselves or family members. Two tax credits, the American Opportunity Credit and Hope Credit are available to help students offset the cost of higher education by reducing the amount of taxable income.
American Opportunity Credit
The American Opportunity Credit originally modified the existing Hope Credit for tax years 2009 and 2010, later extended through 2017 - making the benefit available to a broader range of taxpayers, including many with higher incomes and those who owe no tax. It also adds required course materials to the list of qualifying expenses and allows the credit to be claimed for four post-secondary education years instead of two. Many of those eligible qualify for the maximum annual credit of $2,500 per student.
The Hope Credit generally applies to 2008 and earlier tax years. It helps parents and students pay for post-secondary education. The Hope Credit is a nonrefundable credit. This means that it can reduce your tax to zero, but if the credit is more than your tax, then the excess will not be refunded to you. The Hope Credit amount you are allowed may be limited by the amount of your income and the amount of your tax.
The purpose of form 1098-T is to assist students in preparing IRS form 8860. The university is required to produce the form each year. The form reports the amount of qualified tuition expenses and any qualified non-taxed credits (grants and scholarships) received during the calendar year.
Current Year Forms
The university mails hard copy 1098-T forms to students' permanent addresses during the last week of January. Students who have enrolled in the paperless option on Student Information Online (SIO) can access their 1098-T as early as January 5. To enroll in the paperless option, log into SIO, hover over the 'Finances' tab, select 'IRS Tuition Statement (1098-T)' and then click the 'Edit' button on the right side of the page. Finish by agreeing to the disclosures and click the 'Submit' button. January 19, 2014 is the last day to enroll in the paperless option for the 2013 year. Students may withdraw consent at any time before December 31, 2013.
Additional Sources of Information