How to Use Tax Form 1098-T (Education Credits)
Form 1098-T is your tuition statement from college — the key that unlocks up to $2,500 per student in education credits. The catch: only the person who claims the student as a dependent can use it.
The Steps
Follow these in order
Each card shows the phase, expected time, and any cost. Data checked against official US sources(2025-Latest).
0 of 7 steps
- Before You Go 10 min
Download the 1098-T from the student portal
Schools post it in the bursar or student account section by January 31. Check Box 7 if the school billed spring tuition in December — timing differences between billed and paid amounts are the #1 confusion.
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- Before You Go 15 min
Determine who claims the credit
If the student is a dependent, the parents claim the credit on their return — even if the student paid or took the loan. If the student is not a dependent, the student claims it. The student cannot claim a credit on their own return if someone else claims them as a dependent.
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- Fill / Prepare 20 min
Choose American Opportunity or Lifetime Learning
AOTC: up to $2,500/student, 40% refundable, only for the first 4 years of undergraduate study, requires half-time enrollment. LLCLimited Liability Company — A business structure that protects your personal assets from business debts and lawsuits.Click for official info ↗: up to $2,000/return, covers any education level including courses to improve job skills, no degree requirement. You cannot claim both for the same student.
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- Fill / Prepare 30 min
Enter amounts actually paid, not just billed
The credit is based on qualified tuition and fees paid during the tax year. Compare the 1098-T Box 1 with your payment records — scholarships (Box 5) reduce the creditable amount, and scholarship dollars exceeding tuition can even be taxable income to the student.
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- Fill / Prepare 30 min
Fill out Form 8863
Education credits are claimed on Form 8863, which calculates the phase-out (AOTC: MAGI $80k–$90k single, $160k–$180k joint; LLCLimited Liability Company — A business structure that protects your personal assets from business debts and lawsuits.Click for official info ↗: $80k–$90k single). Tax software asks the questions and fills it in — say yes when it asks about education expenses.
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- Submit & Pay 10 min
File and keep the 1098-T with your records
You do not attach the 1098-T to your return, but keep it — the IRSInternal Revenue Service — The US federal tax agency. It collects federal income taxes, issues refunds, and administers ITINs.Click for official info ↗ can request it. If the school reported wrong amounts, ask for a corrected 1098-T before filing.
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- Follow Up 15 min
Do not double-benefit with 529 money
529 distributions used for tuition cannot also fund the credit — the same dollars cannot count twice. Use 529 money for room and board (not creditable anyway) and pay at least $4,000 of tuition from taxable funds to max the AOTC.
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FAQ
Frequently Asked Questions
Can an international student claim the AOTC?
Generally no — the credits require being a US citizen, resident alien, or dual-status alien taxed as a resident. F-1 students are usually nonresident aliens for their first 5 calendar years and use Form 1040US Individual Income Tax Return — The standard federal income tax form. Variants like 1040-SR (seniors) and schedules attach to it.Click for official info ↗-NR, which does not allow education credits.
My parents claim me as a dependent. Who gets the credit?
They do — including tuition you paid yourself or loans you took out in your name. The credit follows the dependency claim, not the payment. Coordinate before both of you try to claim it; the IRSInternal Revenue Service — The US federal tax agency. It collects federal income taxes, issues refunds, and administers ITINs.Click for official info ↗ rejects the second attempt.
Is the 1098-T the same as student loan interest?
No. The 1098-T reports tuition billed/paid. Student loan interest arrives separately on Form 1098-E and is a deduction (up to $2,500) on your 1040US Individual Income Tax Return — The standard federal income tax form. Variants like 1040-SR (seniors) and schedules attach to it.Click for official info ↗ — you can claim both the tuition credit and the loan interest deduction.
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