Lifetime Learning & American Opportunity Tax Credit / Form 1098T
This material has not been approved by the IRS or the U.S. Treasury and is not an official document. It is offered as a service to the LIU students and families. This is not an official form nor does it necessarily represent official policy of LIU.
IRS Tax Benefits for Education
IRS Taxpayer Advice by Telephone: 1-800-829-1040, Monday through Friday, 7:30 a.m. - 5:30 p.m. (hours in Alaska and Hawaii may vary).
Personal Student Payment Information for LIU students is available at www.ecsi.net/1098T or call 1-866-428-1098.
Exceptions. You do not have to file Form 1098-T or furnish a statement for:
Courses for which no academic credit is offered, even if the student is otherwise enrolled in a degree program;
- Nonresident alien students, unless requested by the student;
- Students whose qualified tuition and related expenses are entirely waived or paid entirely with scholarships; and
- Students for whom you do not maintain a separate financial account and whose qualified tuition and related expenses are covered by a formal billing arrangement between an institution and the student's employer or a governmental entity, such as the Department of Veteran Affairs or the Department of Defense.
Frequently Asked Questions
What is LIU's Federal Tax Identification number?
The Federal Tax Identification number for LIU is 11-1633516.
What is the Lifetime Learning Tax Credit?
The Lifetime Learning Tax Credit is a federal income tax credit that is equivalent to 20% of the first $10,000 paid "out of pocket qualified tuition and related expenses" (see definition), up to $2,000, and non refundable (it is subtracted from the taxes you owe, you cannot claim a credit for more than you owe in taxes; you cannot file a tax return solely to claim this credit).
Which students may qualify for a Lifetime Learning Tax Credit?
- are college juniors, seniors, graduate, and professional degree students, including adults returning to college;
- are enrolled in at least one course leading to a degree, certificate, or improved job skills;
- made "out of pocket payments during the tax year for qualified tuition and related expenses" (see definition) for periods of enrollment occurring within the tax year or during the first three months of the subsequent tax year.
Am I eligible to take the Lifetime Learning Tax Credit if I take courses in a non-degree program?
Amounts that students pay for tuition and related fees may qualify for the Lifetime Learning Tax Credit even if the course is part of a non-degree program. However, the course(s) must be taken by the student to acquire or improve job skills.
What are the "Out of Pocket Payments for Qualified Tuition and Related Expenses"?
"Out of Pocket Payments for Qualified Tuition and Related Expenses" are payments made to a college for fees and tuition (including the costs of books, supplies and equipment needed for a course of study) and other academically related activities (not including gym, student government, health or student activities fees), minus any "untaxed educational benefit" (e.g., most grants, scholarships, fellowships, and fee waivers). It is important to note that the new law requires all nontaxable scholarships and grants to be deducted from the qualified tuition and expenses paid, before a tax payer may claim an American Opportunity Tax Credit or Lifetime Learning Tax Credit.
Who Can Claim the Credit?
Generally, you can claim the lifetime learning credit if all three of the following requirements are met:
- You pay qualified education expenses of higher education
- You pay the education expenses for an eligible student
- The eligible student is either yourself, your spouse, or a dependent for whom you claim an exemption on your tax return
Table 3-1.Overview of the Lifetime Learning Credit
||Up to $2,000 credit per return
|Limit on Modified adjusted gross income (MAGI)
||$122,000 if married filing jointly $61,000 if single, head of household, or qualifying widow(er)
|Refundable or nonrefundable
||Nonrefundable-credit limited to the amount of tax you must pay on your taxable income
|Number of years of postsecondary education
||Available for all years of postsecondary education and for courses to acquire or improve job skills
|Number of tax years credit available
||Available for an unlimited number of years
|Type of degree required education credentials
||Student does not need to be pursuing a degree or other recognized
|Number of courses
||Available for one or more courses
|Felony drug conviction
||Felony drug convictions are permitted
||Tuition and fees required for enrollment or attendance (including amounts required to be paid to the institution for course-related books, supplies, and equipment
|Payment for academic periods
||Payments made in 2011 for academic periods beginning in 2011 or
Beginning in the first 2 months of 2012
Note: Qualified education expenses paid by a dependent for whom you claim an exemption, or by a third party for that dependent, are considered paid by you.
What is an American Opportunity Tax Credit?
The American Tax Opportunity Credit is actually a federal income tax credit that is similar to the Lifetime Learning Tax Credit described above except that it is: equivalent to 100% of the first $2,000 of out of "Out of Pocket Payments for Qualified Tuition and Related Expenses" and 50% of the second $1,000, for a maximum of $2,500.
Which students may qualify for an American Opportunity Tax Credit?
Students who meet the standards for a Lifetime Learning Tax Credit and in addition:
- have not yet completed their second year in college as of the start of the tax year;
- are enrolled at least half-time during at least one quarter in the tax year; and,
- are enrolled in a course of study leading to a degree or a recognized certificate.
Who can claim an American Opportunity Tax Credit?
Taxpayers who meet the standards for claiming a Lifetime Learning Tax Credit. An American Opportunity Tax Credit is available to each qualifying student, even if there is more than one in the taxpayer's family during the same tax year.
Can I claim both a Lifetime Learning Tax Credit and an American Opportunity Tax Credit in one tax year?
Taxpayers cannot claim both an American Opportunity Tax Credit and a Lifetime Learning Tax Credit for the same student in the same tax year. However, the two credits can be claimed simultaneously for different qualifying students in the same tax year. For example, in a family where two children are in college simultaneously, one student may qualify for the American Opportunity Tax Credit while the other may qualify for the Lifetime Learning Tax Credit. In such a case, the parents (taxpayers) may claim both an American Opportunity Tax Credit and a Lifetime Learning Tax Credit on their tax form.
How will I know how much I have paid in "Out of Pocket" qualified tuition and related expenses each year?
If, based on the information available to us, you have made any out of pocket payments for qualified tuition and related expenses, LIU will make this information available to you each year by February. It is up to the taxpayer or his or her tax advisor to determine if the amounts paid will make the taxpayer eligible to claim or more credits in any tax year. This includes payments made at all schools attended by all eligible family members.
For tax year 2012, information is available for the student through www.ecsi.net/1098T and/or calling 1-866-428-1098 for a pin number.
What about payments made with student loans?
Payments paid with proceeds from student loans are considered the same as cash payments and will count as "out of pocket" payments for qualified tuition and related expenses. If you paid for a portion of your qualified expenses using scholarships or grants, those are not considered "out of pocket" payments.
If the information supplied by LIU indicated that I paid a certain amount in tuition and fees, does that mean I can claim that amount for a tax credit?
Not necessarily. It is very important that taxpayers first obtain advice from a qualified tax advisor. There may be some circumstances that could affect an individual's eligibility to claim an educational tax credit, such as:
- the student may have received nontaxable grants or scholarships of which the university has no knowledge;
- the taxpayer may be required to pay an alternative minimum tax, or other special circumstances that could make the taxpayer ineligible (e.g., we will not know if the student/taxpayer earns too little or too much to be eligible, may not know of a relevant felony drug conviction, may not know if the student has already exceeded the "first two years of post-secondary education," or if the student attended other eligible institutions).
I graduated/attended during the Spring 2012 term, why didn’t I get a 2012 1098T form?
If the student attended the Spring and/or Winter 2012 semesters, you may need to reprint the 2011 1098-T form. The majority of students are billed tuition for these two semesters in November and December of 2011. Since the University is required to report activity by calendar year and not academic year, the charges would appear on the student’s account during the calendar year 2011 and go on the 2012 1098-T form. When this overlap happens, Box #7 on the 1098-T form will be indicated when there are amounts included in the total of Box #2 that represent a semester that starts in a future tax year. Please print both 2011 and 2012 1098-T from UIS and provide both copies to your tax preparer.
Do I have to do anything now?
You must keep the University's Registrar's Office informed of your correct name, social security number and address for tax reporting purposes. If you move or change your name between now and next February, you must keep the school informed of your new name or address. In future years, you may be required to provide additional information, such as the name, address, and social security number of the person eligible to claim you each year as tax dependent. When the time comes, LIU will provide a form so that the taxpayer can let the University know the relevant information for tax reporting purposes.
IT IS IMPORTANT TO NOTE that payment of "qualified tuition and related expenses" is only one of several criteria considered when determining eligibility for either tax credit.
Where can I access my payment information?
Your personal statement of payments for qualified tuition and related expenses, and grants, scholarships and fellowships, for the 2012 tax year will be available through the www.ecsi.net/1098T or call 1-866-428-1098.
Your 9-digit social security number and Tax Relief Financial Disclosure Information for 2012 will be displayed > Tax Relief Disclosure Form. Qualifying Charges Paid, Total Fees Paid and Total Grants and Scholarships for the periods of January 1 to June 30, and July 1 to December 2012 will be displayed to assist you in determining your tax credit, if any. This information can be used to assist the taxpayer in calculating his or her out of pocket expenses, since for the tax year 2012, the taxpayer will be responsible to calculate out of pocket expenses. According to the IRS, the University is not responsible to determine a student's eligibility or out-of-pocket payments on qualified tuition and fees for the 2012 tax year.
Form 1098-T FAQ
Q1. I just received a Form 1098-T in the mail. What is this form?
A1. Universities and colleges are required to issue the Form 1098-T Tuition Statement for the purpose of determining a student's eligibility for the American Opportunity Credit (renamed the already existing Hope Credit) and Lifetime Learning education tax credits. For more information on the American Opportunity Tax Credit, please refer to the IRS web site. This form is informational only. The Form 1098-T is used by eligible educational institutions to report information about their students to the IRS as required by the Taxpayer Relief Act of 1997. Eligible educational institutions are required to submit the student's name, address, and taxpayer’s identification number (TIN), enrollment and academic status. Beginning with 2003, educational institutions must also report amounts to the IRS pertaining to qualified tuition and related expenses, as well as scholarships and/or grants, taxable or not.
Form 1098-T is mailed each year by the end of January to those students who had tuition and fee charges in the preceding calendar year and may be used in income tax filings. It should not be considered as tax opinion or advice. Please give this form to your tax preparer to determine if you are eligible for any tax credits.
Q2. What am I supposed to do with the Form 1098-T?
A2. Keep it for your records. Since the University sends your Form 1098-T information to the IRS, there is no need to attach a copy of the form to your tax return. The information contained in the Form 1098-T will help you to determine if you may claim the American Opportunity (renamed the already existing Hope Credit) or the Lifetime Learning education tax credits.
Q3. The Social Security (SSN) or Individual Taxpayer Identification Number (ITIN) Number on my Form 1098-T is missing or incorrect. What should I do?
A3. Reporting to the IRS depends primarily on your SSN, so it is very important for you to have the correct information on file with the University. Please complete Form W-9S which can be printed from the IRS Web site and submit Form W-9S along with a copy of your LIU ID to the Office of the Registrar for your Campus to ensure the data we send to the IRS is accurate.
Q4. Why is Box 1 blank?
A4. Box 1 – Payments received for qualified tuition and related expenses will be blank for all LIU students. Schools are directed to choose a method of reporting, either by reporting the payments received for qualified tuition in Box 1 or by reporting the amounts billed for qualified tuition and related expenses in Box 2. LIU has chosen the latter method. This does not mean your "payments received for qualified tuition and related expenses" are zero. To review all payments and other credits applied to your account during the year please review your account on the myLIU Portal.
Q5: What does an amount in Box 4 mean?
A5. Box 4 - Adjustments made for a prior year shows an amount if qualified tuition and related expenses that were reported on a 1098-T for a prior year were subsequently adjusted or reduced in the current tax year.
Q6. What does an amount in Box 5 mean?
A6. Box 5 - Scholarships or grants shows the net amount of certain forms of educational assistance that was received or applied to your student account during the tax year (January - December), regardless of the term for which the funds were originally intended. Any subsequent adjustments or reductions to educational assistance that occurred in the same tax year are summed into the amount. The net amount is sent to the IRS.
Q7. What does an amount in Box 6 mean?
A7. Box 6 - Adjustments to Scholarships or grants for a prior year shows an amount if scholarships or grants that were reported on a 1098-T for a prior year were subsequently adjusted or reduced in the current tax year.
Q8. What does the check mark in Box 8 mean?
A8. Box 8 - Check if at least half-time student, if checked, indicates that you were considered to be enrolled at least half-time for one or more terms during the tax year.
Q9. What does the check mark in Box 9 mean?
A9. Box 9 - Check if graduate student…, if checked, indicates that you were enrolled in a graduate program for one or more terms during the tax year. The University checks this Box if you attended as a graduate student for any term of your enrollment during the tax year.
Q10. Do I need to report my scholarships as taxable income?
A10. Scholarships that pay for qualified tuition and related expenses are not taxable to the student. However, if any portion of your scholarships paid for non-qualified expenses, then you may be responsible for reporting such portion as taxable income on your tax return. For further guidance, please review IRS Publication 970, ‘Tax Benefits for Education’ at the IRS Web site.
Q11. How are late fees reported on my Form 1098-T?
A11. Fees charged for late registration and/or late payment are shown as non-qualified expenses, and are not reported anywhere on your Form 1098-T.
Q12. How can I get a copy of my 1098-T?
A12. Simply log on to the web to www.ecsi.net/1098T and/or call 1-866-428-1098, you will need your social security number.
Q13. Can I get a copy of last year's Form 1098-T?
A13. Yes, provided that a form was issued to you. Follow the instructions above for getting a copy of your Form 1098-T, making sure to select the tax year of interest from the drop-down menu Box. Please note, the current tax year appears in the window by default.
If you have questions concerning information provided on the 1098-T form, please contact the Office of Student Financial Services at (516) 299-2553, or e-mail your questions to firstname.lastname@example.org.
IRS Publication 970 explains qualifying tuition and fees, and payments. To receive the American Opportunity Tax Credit or Lifetime Learning Credit, you must account for and document the amount you have paid for tuition and expenses on IRS Form 8863 and file with your 2012 federal tax return. You do not file Form 1098-T with your tax return.
For additional information, please consult the IRS Web site or call the Internal Revenue Service at 1-800-829-1040.