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Federal Income Tax laws allow a percentage of tuition payments to be used for educational tax credits against income taxes owed by students or whoever claims them as a dependent when certain conditions are met. These credits are the American Opportunityand Lifetime LearningTax Credits.
The 1098-T Student Tuition Statement provides part of the information needed to claim these education tax benefits. Form 1098-T should be used along with the taxpayer’s own records of tuition and fee amounts paid to complete IRS Form 8863to claim the tax credit.
Prior to 2018, the 1098-T form included an amount in Box 2 representing the qualified tuition and related expenses (QTRE) Pennsylvania College of Technology billed a student account for the calendar (tax) year. Due to a change in institutional reporting requirements under federal law, beginning with tax year 2018, Penn College will report the amount of QTRE paid during the calendar (tax) year in Box 1.
Please note: not all charges billed by Penn College are QTRE as defined by the Internal Revenue Service. QTRE are tuition, fees, and course materials required for a student to be enrolled at or attend an eligible educational institution. Non-qualified expenses billed by Penn College not included on the 1098-T form are charges and fees for housing, dining plans, and parking permits. Therefore, the total payments made to Penn College for a given calendar year most likely will not equal the amount reported in Box 1 of the 1098-T form. Only payments for QTRE received during the current tax year are included in Box 1 of the 1098-T.
This information is being provided as required by the IRS and does not represent tax advice from Pennsylvania College of Technology. The taxpayer should refer to relevant IRS forms and publications or to their tax advisor and should not contact the College for explanations relating to eligibility requirements or calculations of any allowable education tax credit.
IRS Publication 970, Tax Benefits for Higher Education, available on the IRS website, contains information to assist you in determining your eligibility for either of these credits.
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