If you’re an international student holding a Form 1098-T, whether it helps you depends on one thing: your tax residency. Resident aliens for federal tax purposes can use the 1098-T the same way U.S. citizens do, claiming education credits worth up to $2,500. Non-resident aliens can’t claim those credits at all, but the form still matters at tax time because it tells you how much of your scholarship or fellowship is taxable. Everything else, from which forms you file to which software you can use, follows from that split.
Whether Your School Will Even Issue One
Form 1098-T reports what your school received in qualified tuition payments during the calendar year. Box 1 shows total payments for tuition and required enrollment fees. Room and board, health insurance, and transportation don’t count as qualified expenses, even when the school bills them together with tuition.
Federal regulations exempt schools from filing a 1098-T for any student who is a non-resident alien during the calendar year, unless the student specifically requests it. Schools are also exempt when a student’s tuition is entirely covered by scholarships or grants.1eCFR. 26 CFR 1.6050S-1 – Information Reporting for Qualified Tuition and Related Expenses
If you need the form and haven’t received one, contact your registrar or student accounts office and ask them to generate it. Once you request it, the school must comply for that calendar year. You’ll need an SSN or ITIN on file before they can include you in their IRS filing.
Resident Alien or Non-Resident Alien
Your visa doesn’t answer this directly. An F-1 student in year seven might be a resident alien for tax purposes. An F-1 student in year three almost certainly is not. Tax residency is its own classification, controlled by the Substantial Presence Test.
You meet the test if you were physically present in the U.S. for at least 31 days during the current year and 183 days across a three-year lookback: all days this year, one-third of last year’s days, and one-sixth of the days two years back.2Internal Revenue Service. Substantial Presence Test
Students on F, J, M, or Q visas get a carve-out. For your first five calendar years in the U.S. under one of these visas, your days don’t count toward the test. The IRS calls you an “exempt individual,” which keeps you classified as a non-resident alien during that window.3Internal Revenue Service. Exempt Individual – Who Is a Student
After the fifth calendar year, the exemption expires and the standard day-counting rules apply. A student who stays past year five will usually meet the 183-day threshold and become a resident alien. Education credits open up at that point.
Filing Form 8843 every year is what preserves your exempt status. Skip it and the IRS can count all your days, which can shift your entire tax status and affect any treaty benefits you rely on.3Internal Revenue Service. Exempt Individual – Who Is a Student
The Education Credits You’d Be Claiming
Two federal credits use expenses reported on the 1098-T. Both are unavailable to non-resident aliens. Only resident aliens, or non-resident aliens who elect to file jointly with a U.S. citizen or resident spouse, can claim them.4Internal Revenue Service. Education Credits
American Opportunity Tax Credit
The AOTC is worth up to $2,500 per eligible student and is partially refundable. Even if you owe no tax, up to 40% of the credit (a maximum of $1,000) can come back as a refund.5Internal Revenue Service. American Opportunity Tax Credit Qualified expenses include tuition, required fees, and books, supplies, and equipment needed for coursework, whether or not you buy them from the campus bookstore.6Internal Revenue Service. Publication 970, Tax Benefits for Education
Restrictions matter here. The AOTC covers only the first four years of postsecondary education, and no more than four tax years total per student. Students who completed four years of college before arriving for graduate school are out. The student must be enrolled at least half-time for at least one academic period during the year, and a felony drug conviction disqualifies the student entirely.7Office of the Law Revision Counsel. 26 USC 25A – American Opportunity and Lifetime Learning Credits
The statute also requires a Social Security Number on the return to claim the AOTC. An ITIN is not enough.7Office of the Law Revision Counsel. 26 USC 25A – American Opportunity and Lifetime Learning Credits
Lifetime Learning Credit
The LLC is worth up to $2,000 per tax return, calculated as 20% of the first $10,000 in qualified expenses.8Internal Revenue Service. Lifetime Learning Credit It’s non-refundable, so it can zero out your tax bill but won’t generate a refund on its own. There’s no limit on the number of years you can claim it, and it applies to undergraduate, graduate, and professional courses, as well as courses taken to improve job skills. Books and supplies count only if you’re required to pay for them directly through the institution.6Internal Revenue Service. Publication 970, Tax Benefits for Education Identification rules are more flexible than the AOTC’s.
Income Phaseout
Both credits phase out at the same income levels. You get the full credit with modified AGI of $80,000 or less ($160,000 joint). The credit shrinks between $80,000 and $90,000 ($160,000 to $180,000 joint) and disappears above the upper threshold.7Office of the Law Revision Counsel. 26 USC 25A – American Opportunity and Lifetime Learning Credits Most international students on stipends fall well below these limits, so income is rarely the barrier. Residency is.
You claim either credit on Form 8863, filed with your Form 1040.9Internal Revenue Service. About Form 8863, Education Credits
How to Actually Get to a Credit
Most international students can’t claim these credits in their first several years in the U.S. Two paths open the door.
Waiting Out the Five-Year Exemption
Once your five-year exempt period expires and you meet the Substantial Presence Test, you become a resident alien. You file Form 1040 like any U.S. taxpayer, and the tuition expenses on your 1098-T behave the way they would for a citizen. For graduate students who arrived as undergraduates, this often lines up with year five or six in the country. The transition year can create a dual-status filing situation, which has its own rules for how the residency portion of the year is treated.10Internal Revenue Service. Taxation of Dual-Status Individuals
Electing Resident Status Through a U.S. Spouse
If you’re married to a U.S. citizen or resident alien, IRC 6013(g) lets you elect to be treated as a resident alien for the entire tax year by filing jointly on Form 1040.11Office of the Law Revision Counsel. 26 USC 6013 – Joint Returns of Income Tax by Husband and Wife This unlocks education credits immediately, regardless of how long you’ve been in the U.S.
The trade-off is real. The election subjects the non-resident spouse to U.S. tax on worldwide income, not just U.S.-sourced income. And it isn’t a one-year decision. Once made, it carries forward until one spouse revokes it, the couple divorces, or both spouses become non-residents. If the election is ever terminated, the same two people can never make it again.11Office of the Law Revision Counsel. 26 USC 6013 – Joint Returns of Income Tax by Husband and Wife Weigh the credit savings against the cost of taxing your global income before signing on.
Using the 1098-T as a Non-Resident Alien
Non-resident aliens can’t claim education credits, but the 1098-T still does work at tax time. It’s the document you use to figure out how much of your scholarship or fellowship is taxable.
Scholarships and fellowships are tax-free only to the extent they pay for qualified tuition and required fees. Anything above that, like money used for rent, food, or personal expenses, is taxable. Box 1 of your 1098-T represents the qualified expenses your school received. Subtract that from your total scholarship or fellowship, and the difference is what you owe tax on.
The default federal withholding rate on taxable scholarship income paid to non-resident aliens is 30%. Students temporarily in the U.S. on an F, J, M, or Q visa qualify for a reduced 14% rate when the taxable amount is connected to a qualified scholarship or comes from certain qualifying organizations.12Internal Revenue Service. Withholding Federal Income Tax on Scholarships, Fellowships and Grants Paid to Nonresident Aliens A treaty between the U.S. and your home country can push the rate lower or eliminate it.
Your school typically reports this income and any tax withheld on Form 1042-S, not on a W-2 or 1099.13Internal Revenue Service. About Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding When you file Form 1040-NR, you reconcile the two: the 1098-T shows your qualified expenses, the 1042-S shows what was paid and withheld, and the difference gives you your taxable amount and any refund of over-withheld tax.
Tax Treaty Benefits
Dozens of U.S. tax treaties contain provisions that reduce or eliminate tax on scholarship and fellowship income for non-resident student filers. The benefit depends on your country and the specific treaty language. Article 20 of the U.S.-China treaty, for example, exempts scholarship income received by Chinese students temporarily in the U.S., and the exemption can continue even after the student becomes a resident alien, which is unusual since most treaty benefits end when residency shifts.14Internal Revenue Service. Claiming Treaty Exemption for a Scholarship or Fellowship Grant IRS Publication 901 lists the provisions by country.
To claim a treaty position, you typically file Form 8833 with your return, disclosing the specific article you’re relying on.15Internal Revenue Service. About Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b) Skip the form and the IRS can disallow the exemption. Students from countries without a relevant treaty pay tax at the applicable withholding rate.
Filing Forms, Deadlines, and a Software Warning
Every international student on an F, J, M, or Q visa has a filing obligation, even those with no income at all.
Non-resident aliens with U.S.-sourced income file Form 1040-NR. The deadline depends on income type. Wages subject to withholding push the return to April 15. If your only U.S. income is passive (scholarships, fellowships, investment income), the deadline is June 15. An extension to October 15 is available, but any tax owed is still due at the original deadline. Students with no U.S. income still file Form 8843 to preserve their exempt-individual status; on its own, Form 8843 is due June 15.
Resident aliens file Form 1040 with an April 15 deadline and the same extension rules as U.S. citizens. Education credits go on Form 8863, attached to the 1040. Keep the 1098-T, book and supply receipts, and any scholarship award letters in case the IRS asks about your calculation.
One trap catches a lot of international students: most consumer tax software (TurboTax, H&R Block, FreeTaxUSA) does not support Form 1040-NR or Form 8843. If you’re a non-resident alien and you file a Form 1040 through mainstream software, you may end up claiming credits you’re not entitled to and creating a mess that surfaces later as an IRS notice. Use software built for non-resident filings, or work with a preparer who handles international student returns.