Tax Forms Related to Higher Education
It's tax filing season, and for those of you who have saved or paid for college this past year, or repaid student loans, you may have received a tax form related to your activity. It can be confusing to know what to do with each one, so we've offered up some tips below. Let us note right up front: we are certainly not tax experts, so for any in-depth questions or if you need more details, contact your accountant. We've also included links to the applicable IRS webpages for each form.
What it reports: Any amount you paid for qualified tuition and related expenses at an eligible educational institution, as well as any grants and scholarships received
Who issues it: Your educational institution
Where you might use it: In order to receive an American Opportunity Tax Credit (AOTC) or a Lifetime Learning Credit (LLC). As well, you may need to include any amount of your grants and scholarships that exceeded what you paid for tuition, books, and lab fees as taxable income (on line 1 of your 1040).
Other details to know: You won't receive a 1098-T if you took a course that didn't offer academic credit or if your tuition and expenses were completely paid for by scholarships
Where to go for more info: https://www.irs.gov/forms-pubs/about-form-1098-t
What it reports: Any interest you paid on qualified student loans over $600
Who issues it: Your student loan servicer
Where you might use it: For your student loan interest deduction on your Schedule 1
Other details to know: Qualified student loans are those you took out to pay for qualified higher education expenses for you, your spouse, or a dependent. If you paid interest of $600 or more to multiple loan servicers, each one will issue you a 1098-E.
Where to go for more info: https://www.irs.gov/forms-pubs/about-form-1098-e
1099-DIV for U.Plan
What it reports: The interest on any U.Plan Prepaid Tuition Program savings that you left in your account after maturity and was then invested in a money market fund
Who issues it: MEFA
Where you might use it: In the dividends you report on your 1040
Other details to know: MEFA will only mail a 1099-DIV if at least $10 in interest is earned
Where to go for more info: https://www.irs.gov/forms-pubs/about-form-1099-div
What it reports: The distributions you used from a qualified tuition program like a 529 plan or a Coverdell educational savings account
Who issues it: The administrating organization for your qualified tuition program
Where you might use it: In reporting your taxable income, but only if any amount of your distributions exceeded what you paid for qualified education expenses. You also may need to calculate an additional 10% tax on that excess amount. If all the distributions were used to pay for qualified education expenses, you don't need to report anything.
Other details to know: You may receive more than one 1099-Q if you took distributions from multiple programs or even if you have more than one account with one program
Where to go for more info: https://www.irs.gov/forms-pubs/about-form-1099-q