If you paid qualified education expenses during 2026, you may receive Form 1098-T from your school. This form helps determine whether you qualify for valuable education tax benefits, such as the American Opportunity Credit or the Lifetime Learning Credit.
Schools must provide Form 1098-T to eligible students by January 31, 2027, and file a copy with the IRS. Many colleges and universities make the form available electronically through the student portal.
Even if someone else paid your education expenses, such as a parent or grandparent, you may still receive Form 1098-T. However, education expenses can only be used for a tax benefit once. Generally, either the student or the person claiming the student as a dependent can claim the credit, but not both.
What Are Qualified Education Expenses?
Qualified education expenses generally include:
- Tuition
- Required enrollment fees
- Course materials that must be purchased directly from the school as a condition of enrollment
Your school reports qualified expenses paid during the year in Box 1 of Form 1098-T.
How Do I Enter Form 1098-T in the Program?
To report your education expenses and determine if you qualify for an education credit:
- Navigate to the Federal section.
- Select Deductions.
- Select Credits.
- Choose Education Credits.
The program will guide you through entering your Form 1098-T information and calculating any available credit.
Where Are Qualified Expenses Reported?
Beginning with tax year 2018 and continuing through tax year 2026, schools report qualified tuition and related expenses based on amounts actually paid during the calendar year.
You can find these expenses in:
- Box 1 of Form 1098-T
The amount reported may be used when calculating education credits, subject to IRS eligibility rules.
What Does Box 4 Mean?
Box 4 reports adjustments to qualified expenses that were reported on a prior year's Form 1098-T.
This usually means the school reduced previously reported tuition or fees. If you claimed an education credit based on those expenses in an earlier year, you may need to repay part of the credit by reporting a credit recapture on your tax return.
Please refer to How do I report my 1098-T Box 4 information? for complete reporting instructions.
What Does Box 5 Mean?
Box 5 reports scholarships and grants that were applied to your educational expenses.
Because scholarships and grants typically pay for education costs on your behalf, they may reduce the amount of expenses eligible for an education credit.
What Does Box 6 Mean?
Box 6 reports adjustments made to scholarships or grants that were reported on a previous year's Form 1098-T.
These adjustments could affect a previously filed tax return. In some cases, you may need to amend a prior-year return.
How Much of an Education Credit Can I Claim?
In many situations, your eligible education expenses are calculated by subtracting scholarships and grants from qualified education expenses.
In simple terms:
Qualified Expenses − Scholarships and Grants = Potential Eligible Expenses
You generally can only receive a tax benefit for expenses paid out of pocket.
When Box 5 Is Greater Than Box 1
If your scholarships and grants in Box 5 are greater than the qualified expenses reported in Box 1, you generally cannot use those expenses to claim an education credit.
The excess scholarship amount may be taxable and must be reported on the return of the person whose Social Security number appears on the Form 1098-T.
To report taxable scholarship income in the program:
- Navigate to the Federal section.
- Select Income.
- Choose Less Common Income.
- Select Other Compensation.
- Enter the excess scholarship amount under Scholarships and Grants.
When Box 5 Is Less Than Box 1
If the amount in Box 5 is less than the amount in Box 1, you may qualify to claim education expenses for a tax credit.
Generally:
Box 1 − Box 5 = Out-of-Pocket Qualified Expenses
To enter these expenses:
- Navigate to the Federal section.
- Select Deductions.
- Choose Credits.
- Select Education Credits.
The program will determine whether you qualify for an education credit and calculate the allowable amount.
What Do Boxes 7, 8, and 9 Mean?
Box 7
A checkmark in Box 7 indicates that the amount reported includes expenses for an academic period that begins during the first three months of the following year.
Box 8
A checkmark in Box 8 means the student was enrolled at least half-time during the year.
Box 9
A checkmark in Box 9 indicates the student was enrolled in a graduate-level program.
Important Note About the Tuition and Fees Deduction
The Tuition and Fees Deduction was permanently repealed and is not available for tax year 2026 returns.
However, eligible taxpayers may still benefit from education tax credits, including:
- American Opportunity Credit (AOTC)
- Lifetime Learning Credit (LLC)
These credits can often provide a greater tax benefit than the former deduction.