What is Form 1098-T?
Your college, university, or eligible educational institution sends a 1098-T reporting payments for qualified tuition and related expenses, scholarships received, and your enrollment status. This form is used to claim education credits on Form 8863.
SupportedKey Boxes
| Box | Description | Where it flows |
|---|---|---|
| Box 1 | Payments for qualified tuition and related expenses | Form 8863 (net of scholarships) |
| Box 4 | Adjustments for prior year | Reduces current-year qualified expenses |
| Box 5 | Scholarships or grants | Reduces qualified expenses |
| Box 6 | Prior year scholarship adjustments | Added back to qualified expenses |
| Box 7 | Includes Jan–Mar next year amounts | Informational |
| Box 8 | At least half-time student | Required for AOTC eligibility |
| Box 9 | Graduate student | Disqualifies AOTC (LLC only) |
How PaisaTax Handles It
- Upload or manual add — one slot per educational institution
- Net qualified expenses = Box 1 - Box 4 - max(0, Box 5 - Box 6)
- AOTC eligibility gates: Box 8 (half-time) must be checked AND Box 9 (graduate) must not be checked for AOTC
- Education credits: Net expenses flow to Form 8863 for either AOTC or LLC computation
Common Situations
- AOTC vs. LLC: AOTC is worth up to $2,500 per student (40% refundable) but requires half-time enrollment, not a graduate student, and first 4 years only. LLC is $2,000 max per return, no enrollment requirement, any year.
- Scholarships exceed tuition: If Box 5 exceeds Box 1, the excess may be taxable income. No education credit is available.
- Graduate students (Box 9 checked): Only the Lifetime Learning Credit is available. AOTC is disqualified.
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Tip
Both AOTC and LLC phase out based on MAGI. For 2025, the phaseout range is $80,000–$90,000 (Single) and $160,000–$180,000 (MFJ).