Form 1098-T is used by educational institutions to report the receipt of student tuition payments. By reporting these payments to the IRS, students or payees may also be entitled to ad adjustment to income or a tax credit. Eligible educational institutions file one 1098-T form for each student who is enrolled in a program who has made a reportable transaction. Additionally, insurers must file this form for each person to whom they made reimbursements or refunds for qualified tuition and related expenses. Put simply, if your organization or institution received a qualified tuition payment, you should be very familiar with form 1098-T.
That said, there are a few exceptions to this rule. Student courses that have no actual academic credits attached to them are generally exempt. Moreover, tuition that has been waived or otherwise paid by scholarship, including billing arrangements paid by the student’s employer or certain government agencies, does not typically generate a filing requirement for form 1098-T.
While Form 1098-T is not a difficult form to complete, institutions who use it must file hundreds, sometimes thousands of them. Advanced Micro Solutions (AMS) makes this easier. Our software solutions to take care of all your 1099 and 1098 filing requirements.
More About Form 1098-T
Form 1098-T is not a complicated form. All that you, the accountant or administrator, need to include is personal information about the students, the payments received, any adjustments, and scholarships or grants provided to the individual. On its own, this form should not take very long to complete.
The challenge with Form 1098-T is not in the content required to complete it. Instead, the issue lies in the hundreds or thousands of times the process must be repeated, often one for each student. This is impossible to do manually, which means an automated payroll system is the easiest option. This is exactly the type of service that AMS can provide.
Education-Based Filing Forms
Most people aren’t surprised to learn the tax code is deeply entwined with education-related expenses. At times, accounting for education-based tax adjustments can feel like the proverbial final straw during the transitional stress of starting at a new school. Don’t let your institution add to this stress. Report your required tax filings in a reliable, timely, and cost-effective fashion. Issue both mail-based student/family recipient forms and submit your forms directly to the IRS with AMS.
Indeed, along with the 1098-T form, there is an entire range of 1098 and 1099 filing forms that apply to saving for, spending on, and repaying tuition expenses:
- Form 1099-Q: This form is filed to account for distributions made from qualified tuition programs—namely education savings accounts and the financial institutions that manage them. Use the IRS instructions above to determine things like whether you issue the recipient form to the student or the originating family member, but use AMS software to help you manage, report, and print the applicable data and tax forms.
- Form 1098-T: This form is used by educational institutions to report tuition payments received by a student or their beneficiary. Based on household income and personal tax information, any number of tax deductions and incentives may be created through education payments. Form 1098-T is how recipients and institutions document and prove the amount of the payments made in a given year.
- Form 1098-E: This form is used to account for student loan interest. In other words, if you’re a financial institution or debt collector who receives more than $600 in student load interest payments, you’ll need to report this form to both the recipient and directly to the IRS. Keep in mind that with this $600 threshold not all student loan repayments generate this filing requirement.
Software Support and Costs from AMS
Educational institutions send out thousands of the forms listed above, indicating a need for a semi-automated accounting system. Our W-2/1099 Forms Filer, our base program, is the perfect software for the job. More than just a tool for Form 1098-T filing, this software offers a wide range of essential filing support, data management, and add-on modules for custom software packaging. Our product catalog demonstrates how we create comprehensive, yet cost-effective, software solutions:
- W-2/1099 Forms Filer
- Payroll Module
- E-File Direct
- Affordable Care Act Filer
- 1042-S Filer
- Software-Generated Forms
- Forms Filer Plus
With an intuitive, menu-driven platform, Support Knowledge Base, free software demo download, and customer support resources, you’ll have leverage over your software filing solution from the get-go. If you have lingering questions about implementing the right software package for your institution or business firm, contact our Sales and Information team at (800) 536-1099.
Don’t let 1098-T form filings overwhelm your office. Trust in an AMS product and finish the job faster, easier, and more accurately than ever before.