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1098-T Frequent Asked Questions

1. When will 2007 1098-T's be mailed to taxpayers?
2. How can the taxpayer get a copy of their 1098-T?
3. Where can taxpayers find more information about educational tax credits?
4. Who do I contact to report a missing or incorrect social security number on my 2007 1098-T, Tuition Statement?
5. Does the Internal Revenue Service consider Form 1098-T Tuition Statement to be a valid record of education expenses?
6. Are instructions provided to the taxpayer on the 2007 1098-T?
7. Are payments for Spring semester 2008 included on the 2007 1098-T?
8. What fees are included in Box 1, Payments received for qualified tuition & related expenses?
9. What payment amounts are not reported on the 1098-T?
10. What amounts are included in Box 5, Scholarships and Grants?
11. Why are the amounts in Box 4, Adjustments to tuition and fees for a prior year and in Box 6, Adjustments to scholarships or grants for a prior year, reported as positive numbers?
12. What do I tell taxpayers who dispute the amounts that Minnesota State Colleges & Universities reported on their 1098-T?
13. Data privacy rules
14. Is the financial information on the 1098-T reported to the IRS?
15. What is a W-9S and what does it have to do with 1098-T reporting?
16. Are 1098-T's sent to international students?
17. When will the 2007 1098-T data be available for reprints using the 1098-T Tuition Payment Statement Report, AR1098CP?

Answers

Answer 1: The taxpayer's copy of the 2007 1098-T must be postmarked by January 31st, 2008. Taxpayers should expect to receive their 1098-T Tuition Statements by February 7th.

Answer 2: Campuses can reprint 2007, 2006, 2005 & 2004 1098-T's on campus through the ISRS report screen AR1098CP, 1098-T Tuition Payment Statement Report. If the taxpayer wants a reprint of a 1098-T prior to tax year 2004, please contact Ann Page in Tax Services, at 651-632-5007 or by email at Ann.Page@so.mnscu.edu, with the following information: taxpayer name, Tech Id, SSN (if not in ISRS), campus(s), current mailing address, a daytime phone number and the tax year to reprint.

Answer 3: For more information, see IRS Publication 970, http://www.irs.gov/pub/irs-pdf/p970.pdf, Tax Benefits for Education, or the Frequently Asked Questions, http://www.irs.gov/faqs/faq3-2.html, in the "Educational expenses" section on IRS.gov.

Answer 4: If you received a 2007 1098-T with an invalid or incorrect social security number (SSN), please update your SSN with your home campus before contacting Ann Page in Tax Services at 651-632-5007 or by email at Ann.Page@so.mnscu.edu to correct the SSN on your 2007 1098-T reporting.

Answer 5: No, Form 1098-T is not acceptable documentation for educational expenses. According to the Internal Revenue Service "Form 1098T is an information document used by universities to report the amounts paid by students or amounts billed for tuition. It has often been used as a source document, but often it includes only the amounts billed for tuition. Therefore, taxpayers need to keep records of what they spent on tuition and how much they paid for related expenses to justify the education credits and expenses they claim on their returns." http://www.irs.gov/individuals/article/0,,id=163087,00.html

Answer 6: Yes. The top of the 2007 1098-T form contains the following information under the heading STUDENT INSTRUCTIONS: An eligible educational institution, such as a college or university, in which you are enrolled must furnish this statement to you. You, or the person who may claim you as a dependent, may be able to take either the tuition and fees deduction or claim an education credit on Form 1040 or 1040A for the qualified tuition and related expenses that were actually paid in 2007. The amount in box 1 may represent an amount other than the amount actually paid in 2007. Do not contact your institution for explanations of the requirements for (and how to figure) any allowable tuition and fees deduction or education credit that you may claim. For more information about the deduction or credit, see IRS Publication 970, Tax Benefits for Education, Form 8863, Education Credits, and the Form 1040 or 1040A instructions. Please Note: If you took credit courses at more than one MN State College or University, you will receive only one 1098-T. Box 1 shows total payments received from any source for qualified tuition and related expenses less any related reimbursements or refunds. Box 4 shows any adjustment made for a prior year for qualified tuition and related expenses which decrease the amount of qualified tuition and related expenses that were reported on a prior year Form 1098-T. This amount may reduce any allowable education credit you may claim for the prior year. See Form 8863 or Pub. 970 for more information. Box 5 shows the total of all scholarships, grants & third party payments that were administered and processed by Minnesota State Colleges & Universities, excluding scholarships, grants & third party payments restricted to nonqualified tuition or related expenses. The amount of scholarships or grants for the calendar year (including those not reported by the institution) may reduce the amount of any allowable tuition and fees deduction or the education credit you may claim for the year. Box 6 shows adjustments to scholarships or grants for a prior year that decrease scholarships or grants reported on a prior year Form 1098-T. This amount may affect the amount of any allowable tuition and fees deduction or education credit you may claim for the prior year. See Pub. 970 for how to report these amounts. If Box 7 is checked, the amount in Box 1 includes amounts for an academic period beginning January-March 2007. See Pub. 970 for how to report these amounts. Box 8 shows whether you are considered to be carrying at least one-half the normal full-time workload for your course of study at Minnesota State Colleges & Universities. If you are at least a half-time student for at least one academic period that begins during the year, you meet one of the requirements for the Hope credit. You do not have to meet the workload requirement to qualify for the tuition and fees deduction or the lifetime learning credit. Box 9 shows whether you were considered to be enrolled in a program leading to a graduate degree, graduate-level certificate, or other recognized graduate-level educational credential. If you were enrolled exclusively in a graduate program, you are not eligible for the Hope credit, but you may qualify for the tuition and fees deduction or the lifetime learning credit. You can not claim the Hope credit or the lifetime learning credit if you (or your spouse, if filing jointly) were a nonresident alien during 2007, and did not elect to be treated as a resident alien for tax purposes. More information on nonresident alien taxation can be found in IRS Pub. 519, U.S. Tax Guide for Aliens. For more detailed financial information, access your account detail via your College or University homepage: http://www.mnscu.edu/campuses/index.html.

Answer 7: 2007 1098-T Tuition Statement reporting includes all payments for qualified tuition and related expenses received by Minnesota State Colleges & Universities in 2007 on behalf of the taxpayer from any source. Payments made for Spring 2008 are reportable only if the student was enrolled in an academic term beginning in 2007 or earlier. (from IRS Notice 2006-72 Information Reporting for Qualified Tuition and Related Expenses found in Internal Revenue Bulletin 2006-36 dated September 5, 2006 at http://www.irs.gov/irb/2006-36_IRB/ar10.html) Note: For information on whether such payments qualify for a 2007 tax benefit, please refer the taxpayers to IRS Publication 970 Tax Benefits for Education and/or their tax professional.

Answer 8: For a payment to appear on the 1098-T, it must be for "Qualified Tuition and Related Expenses". For a list of Minnesota State Colleges & Universities object codes that are included in Qualified Tuition and Related Expenses, please go to the Tax Services website on Student Tax Information, Student Tuition Statement - 1098-T at: http://www.finance.mnscu.edu/taxinformation/student/statements / doc/2007_1098t_object_codes.pdf

Answer 9: Nonqualified Tuition and Related Expenses are not reported on the 1098-T. Minnesota State Colleges & Universities uses a two step test to determine whether a fee is eligible as a "Qualified Tuition and Related Expense" under 26 U.S.C. § 25A. First, the tuition or fees must be "required for the enrollment or attendance at an eligible educational institution for courses of instruction." (26 U.S.C. § 25A(f)(1)(A)). Second, even if required for enrollment, certain fees are excluded. These include education involving sports, unless the course or education involved is part of the student's degree program (26 U.S.C. § 25A(f)(1)(B)); and non-academic fees, including "Student activity fees, athletic fees, insurance expenses, or other expenses unrelated to an individual's academic course of instruction" (26 U.S.C. § 25A(f)(1)(C)). The text of 26 U.S.C. § 25A can be accessed at: http://uscode.house.gov . Click on Search the U.S. Code. To access the link to the text of 26 U.S.C. § 25A, on the Search page, enter 26 as the Title and 25A as the Section. Note: The amounts reported on the taxpayer's Minnesota State Colleges & Universities 1098-T are correct based on Minnesota State Colleges & Universities interpretation of the Internal Revenue Code 26 U.S.C. § 25A and an analysis of Minnesota State Colleges & Universities accounts receivable process. Taxpayers should rely upon their own financial records and the advice of their tax professional when determining whether an educational tax benefit exists. You may refer the taxpayer to the Student Instructions on the 1098-T form (FAQ #13), to the IRS web site (www.irs.gov) and Publication 970, http://www.irs.gov/pub/irs-pdf/p970.pdf, for further information on educational tax credits. Minnesota State Colleges & Universities will not change 1098-T reporting based on a taxpayer's interpretation of the Internal Revenue code.

Answer 10: Box 5 Scholarships or Grants includes all scholarships, grants and third party payments that are administered and processed on behalf of the taxpayer (student) by a Minnesota State Colleges & Universities institution. Financial Aid and third party payments that are coded as restricted to Nonqualified Tuition and Related Expenses, such as books or tools, will not be included in Box 5. The amount of scholarships or grants for the calendar year (including those not reported by the institution) may reduce the amount of any allowable tuition and fees deduction or the education credit that a taxpayer may claim for the year. It is up to the taxpayer and their tax advisor based on the taxpayers records to determine how scholarships, grants and third party payments will affect any allowable tuition and fees deduction or education credit. The student's account detail can be accessed through their home campus webpage or by contacting their campus Business Office. Student loans are not included in Box 5. Taxable Tuition Waivers do not appear in Box 5 but are included in Box 1, Payments received for qualified tuition & related expenses.

Answer 11: The IRS requires that we report all financial information in whole numbers. The amounts reported in Box 4, Adjustments to tuition and fees for a prior year and in Box 6, Adjustments to scholarships or grants for a prior year are decreases to the amounts reported on a prior year 1098-T.

Answer 12: The 1098-T is an information return provided by Minnesota State Colleges & Universities for the convenience of the taxpayer. The amounts reported on the taxpayer's Minnesota State Colleges & Universities 1098-T are correct based on Minnesota State Colleges & Universities interpretation of the Internal Revenue Code 26 U.S.C. § 25A (see FAQ #7) and an analysis of Minnesota State Colleges & Universities accounts receivable process. Taxpayers should rely upon their own financial records and the advice of their tax professional when determining whether an educational tax benefit exists. Do not give the taxpayer tax advice. You may refer the taxpayer to the Student Instructions on the 1098-T form (FAQ #13), to the IRS web site (www.irs.gov) and Publication 970, http://www.irs.gov/pub/irs-pdf/p970.pdf, for further information on educational tax credits. Minnesota State Colleges & Universities will not change 1098-T reporting based on a taxpayer's interpretation of the Internal Revenue code.

Answer 13: Tax Services will only mail a 1098-T to an address in ISRS database. If taxpayer wants 1098-T to be sent to an accountant or to a different address: update ISRS or get the taxpayers consent in writing. The permission form must be signed by the taxpayer.

Answer 14: Yes. In addition to the financial information, Minnesota State Colleges & Universities must also report the student's name, social security number, whether the student was enrolled more than half time in the current tax year, whether they were a graduate student, and whether any of the payments that appear in Box 1 were for classes starting in the first 3 months of 2008.

Answer 15: The IRS requires that 1098-T information be reported with a taxpayer identification number, either a Social Security Number (SSN), or an Individual Taxpayer Identification Number (ITIN). Each fall, Minnesota State Colleges & Universities sends IRS Form W-9S, Request for Student's Taxpayer Identification Number, to all Minnesota State Colleges & Universities students whose campus person records have invalid or missing SSN's. If the student does not provide their SSN or ITIN, Minnesota State Colleges & Universities will report their 1098-T data to the IRS with out their taxpayer identification number. The IRS may impose a penalty on the student for failing to supply their taxpayer identification number as requested.

Answer 16: All international students with 2007 1098-T reportable transactions will receive a 1098-T from Minnesota State Colleges & Universities for 2007. Individuals can not claim the Hope credit or the lifetime learning credit if they (or their spouse, if filing jointly) were a nonresident alien during 2007, and did not elect to be treated as a resident alien for tax purposes. More information on nonresident alien taxation can be found in IRS Pub. 519, U.S. Tax Guide for Aliens at the IRS web site: www.irs.gov. It is up to the individual taxpayer to determine their tax residency status and their eligibility for educational tax benefits.

Answer 17: The 1098-T Tuition Payment Statement Report, AR1098CP, will be available for 2007 1098-T reprints by January 31st, 2008. 2006, 2005 & 2004 1098-T reprints are also available through the 1098-T Tuition Payment Statement Report, AR1098CP. For reprints of 1098-T's prior to 2004, please contact Ann Page in Tax Services at 651-632-5007.