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Form 1098-T

  • The 1098-T tax form informs the taxpayer if he/she is eligible for the  American Opportunity Credit  in tax year 2015. The American Opportunity Credit provides a maximum tax credit of $2,500 for tax year 2015 based on the taxpayers modified adjusted gross income (MAGI). The MAGI limits are $90,000 for single, head of household, widow(er) taxpayers and $180,000 for taxpayers married filing joint.

    Our 1098-T forms will be available to view, print online using Webadvisor and mailed by the close of business on Friday, Jan. 31. 

    This year Carroll is reporting numbers on its tax form using registration information, and not cash payments for tax year 2016. The changes were provided by our software vendor and meet the current IRS reporting requirements.

  • Eligibility

    The student, if not considered a dependent for income tax purposes, is eligible to claim the credit. If the student had tuitions and fees paid by the parents, then the parents can claim the credit providing income for the year is within IRS guidelines. If the student or the parents are married filing separate, then the American Opportunity Credit and the Lifetime Learning Credit cannot be taken. However, the tuition and fee deduction can be used. 

    Recommendations

    Tuition and fee deduction is another means to get a deduction as an adjustment to income on your 1040 or 1040A form. 

    The deductible amount may be as much as $4,000 based on income levels. If your modified adjusted income level is less than $90,000 for single and $180,000 for married filing jointly, then you would be eligible to take the deduction. You may not take the deduction if you are  married filing separately or if another person can claim you as a dependent on his or her tax return.

    Review your personal records for payments made to the college during calendar year 2016. If you have a question regarding what to report, consult with your tax preparer.  

    Remember, Form 1098-T reports registrations made during calendar year 2016 and does not represent cash payments for the year. Review your financial records and record payments when reporting on IRS Form 8863

    If additional information is needed, contact the college's tax credit line at 410-386-8496. Make sure to leave a message and a phone number so a representative can respond. 

    Questions relating to your individual tax return cannot be addressed by the college and should be discussed with your tax adviser.

    The Form's Boxes

    • Box “one” is not being used this year for reporting purposes.
    • Box "two" represents total amount billed for tuition and qualified fees during calendar year 2016.  If the student received a waiver during the year, then the amount of the waiver would reduce the amount in box "two."  This amount does not represent cash payments for the year.
    • Box "four" nets adjustments to the student's account.  If a number is posted to box "four," then this amount should be subtracted from the amount in box "two."  Items included in box "four" are the tuition and fee adjustments during the prior year. For example, if the student registered for a class in November 2016 for the Spring 2017 semester. The amount would show as an adjustment on the 1098-T because the registration took place in calendar 2016. 
    • Box "five" reflects financial aid and scholarships made to the student during the tax year.  If the student's aid exceeds tuition and fees, then the tax credit may not be taken. Review this number to verify that the amount for financial aid and scholarships is not taxable.
    • Box "six" shows adjustments for scholarships and/or grants for a term held in the prior tax year.  
    • Box "seven" will be marked with a "Y" if the student made a registration in tax year 2016 but the class is scheduled for calendar 2017. The registration is reflected in box "two."
    • Box "eight" tells the recipient if he/she qualifies for the American Opportunity Credit. The law states that a student must be enrolled at least half time (minimum - six credit hours in one term) in a degree or certificate program. If the student qualifies, then the box will be marked with an "X."

    Example: Jane Doe took six credit hours during a year at Carroll. If she took a three credit course in the spring and a three credit course in the fall, she would not qualify because under the law because she would not be considered a half-time student in any one term. If Jane took six credits in the spring term, she would qualify for the Hope Scholarship Credit because under the law she would be considered a half-time student.

    Forms to Complete

    To apply for the American Opportunity Credit, one should refer to IRS tax form 8863 and Publication 970 when completing your forms. If you are experiencing difficulty completing the form, you should consult a tax adviser.

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