Do I Have to Report Form 1098-T on My Taxes?

You do not have to report Form 1098-T on your taxes in the sense of attaching it or copying its numbers onto your return. Your school sends the form to both you and the IRS, so the agency already has the information. The form matters for two reasons the searcher usually cares about: you need its data to claim an education tax credit worth up to $2,500 per student, and if your scholarships exceeded your tuition, part of that difference may be taxable income you do have to report.

What the 1098-T Is For

The 1098-T is an informational statement, not a tax form you file. Your school issues one each year it processes a reportable transaction on your account, provided the school is an eligible educational institution — generally an accredited college, university, or trade school that takes part in federal student aid programs.¹

Two boxes drive almost every decision you’ll make with the form. Box 1 shows the total payments the school received during the calendar year for qualified tuition and related expenses. Box 5 shows the scholarships or grants the school administered on your behalf.² Compare those two numbers first. Which is larger tells you whether you’re looking at a potential credit or potential taxable income.

Qualified expenses for tax purposes are narrower than what you actually paid the school. Tuition and required fees count. Room and board, insurance, medical expenses, and transportation do not, even if the school required them.³ Required books and supplies you bought elsewhere do count, and they won’t appear on the form because the school never saw those receipts. So the numbers on the 1098-T are a starting point, not the final figure you use.

When You’d Actually Use the Form

You’d pull out the 1098-T for one of two situations: you’re claiming an education credit, or your scholarships were larger than your qualified tuition.

If you’re claiming a credit, the 1098-T gives you the school’s employer identification number and the amounts you’ll use as a reference when filling out Form 8863, which is the form that actually claims the American Opportunity Tax Credit or the Lifetime Learning Credit.⁴ Form 8863 asks whether you received a 1098-T, but you never staple it to your return.

The AOTC is worth up to $2,500 per eligible student per year, equal to 100% of the first $2,000 of adjusted qualified expenses plus 25% of the next $2,000. Up to 40% of the credit (a maximum of $1,000) is refundable, meaning you can get it back even if you owe no tax. The AOTC is limited to the first four years of higher education and requires at least half-time enrollment in a degree or credential program.⁵

The Lifetime Learning Credit is worth up to $2,000 per return (not per student), calculated as 20% of the first $10,000 in adjusted qualified expenses. It’s nonrefundable, but it has no four-year limit and no half-time requirement, and it covers courses taken to improve job skills.⁶ Both credits phase out between $80,000 and $90,000 of modified adjusted gross income for single filers, and between $160,000 and $180,000 for joint filers.⁵

Adjusted qualified expenses is the number that goes on Form 8863. It equals your total qualified costs minus tax-free scholarships and grants. That’s why Box 5 matters even when you’re claiming a credit: scholarships reduce the expense base the credit is calculated on.

Use your own records to compute the actual figure. Bursar statements, receipts, and canceled checks are what the IRS expects to see if the claim is questioned, not the 1098-T itself.⁷

When Scholarships Exceed Tuition, You May Owe Tax

This is the situation where the 1098-T creates a reporting obligation even if you’re not claiming a credit. If Box 5 is larger than Box 1, some or all of that difference is likely taxable income.

Scholarships are tax-free only to the extent they pay for tuition, required fees, and required books, supplies, and equipment. Any portion used for room and board, travel, or other living expenses is taxable. Amounts paid for teaching or research services required by the scholarship are also taxable, regardless of what you spent the money on.⁸

To calculate the taxable portion, start with Box 5, subtract your qualified education expenses (including required books and supplies you paid for out of pocket), and report any remaining balance on Schedule 1 (Form 1040), Line 8, unless it was already included on a W-2.⁸

A full-ride scholarship covering housing can easily produce several thousand dollars of taxable income. Because the IRS already has your 1098-T data, ignoring the difference tends to draw a notice.

Who Claims the Credit: Student or Parent

Dependency status decides this, not who paid the bill.

If the student is claimed as a dependent on someone else’s return, only the person claiming the dependent can claim the education credit. This is true even if the student paid tuition from their own earnings or with loan proceeds. The IRS treats those payments as if the claimant made them.³

If the student is not claimed as a dependent, the student is the only person who can claim the credit, even if a parent paid the full bill. Payments made by a parent on behalf of an independent student are treated as if the student made them.

The rule that catches families off guard: a student who is eligible to be claimed as a dependent but isn’t actually claimed still cannot take the credit. What matters is whether you could be claimed, not whether anyone did. If a parent chooses not to claim the student, coordinate the decision. A silent oversight on the parent’s return can lead the IRS to disallow the student’s credit.

If You Didn’t Get a 1098-T, or the Numbers Look Wrong

Schools are not required to issue the form in every case. Common exceptions include nonresident alien students (unless the student requests one), students taking only noncredit courses, students whose tuition was entirely covered by scholarships, and students under formal billing arrangements where an employer or government agency pays the school directly.⁹

You can still claim an education credit without the form if the school wasn’t required to issue one, provided you can show enrollment at an eligible institution and document your payments. If the school was required to issue it but didn’t, request it after January 31 and cooperate with the school’s information-gathering before filing.¹⁰

If the form arrived but the amounts don’t match your records, contact the school’s financial office and ask for a corrected version. The form has a “CORRECTED” checkbox for reissues.² While you wait, complete Form 8863 using your own records rather than Box 1.⁷

One box worth glancing at: Box 6 shows adjustments to a prior year’s scholarships. If it’s populated, you may need to file an amended return (Form 1040-X) for the year originally affected.²

Records to Keep

The 1098-T on its own won’t carry you through an audit. Keep bursar statements for each semester, receipts for required books and supplies, and records of any scholarship or grant amounts the school didn’t report. If your claimed expenses go beyond Box 1, the IRS expects receipts, canceled checks, or similar proof of payment.¹¹ Hold these records for at least three years after filing the return that claims the credit.

1
Internal Revenue Service. Eligible Educational Institution
2
Internal Revenue Service. Form 1098-T Tuition Statement 2026
3
Internal Revenue Service. Publication 970 (2025), Tax Benefits for Education
4
Internal Revenue Service. Form 8863 – Education Credits (American Opportunity and Lifetime Learning Credits)
5
Internal Revenue Service. American Opportunity Tax Credit
6
Internal Revenue Service. Lifetime Learning Credit
7
Internal Revenue Service. 2025 Instructions for Form 8863
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Internal Revenue Service. Topic No. 421, Scholarships, Fellowship Grants, and Other Grants
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Internal Revenue Service. Instructions for Forms 1098-E and 1098-T (2026)
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Internal Revenue Service. Instructions for Form 8863 (2025)
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Internal Revenue Service. Education Credits: Questions and Answers