Education Tax Credits


The Internal Revenue Code provides both tax credits and deductions that may be taken to reduce the federal income tax burden for students or those paying the costs of a student’s higher education. Briefly, credits directly reduce the amount of income tax owed, while deductions reduce the amount of taxable income upon which income taxes are computed.

The 1098-T form is informational only and should not be considered tax advice. We strongly encourage you to speak with a qualified tax advisor in all matters related to the tax implications of education expenses.

The 1098-T form serves to notify students they may be eligible for federal income tax education credits as the Lifetime Learning Credit and the American Opportunity Credit as part of their Federal Income Tax Return.

Western reports payments received for qualified tuition and related expenses (QTRE) on IRS Form 1098-T. Box 1 will show the total payments received for QTRE in a given calendar year (January 1 - December 31), from any source.

1098-T forms are required to be made available by January 31st.

1098-T FAQs

In January of each year, Western Washington University electronically provides IRS Form 1098-T to all students who had qualified tuition and other related educational expenses billed to them during the previous calendar year. This form is informational only and should not be considered as tax opinion or advice. It serves to alert students that they may be eligible for federal income tax education credits. Receipt of Form 1098-T does not indicate eligibility for the tax credit. To determine the amount of qualified tuition and fees paid, and the amount of scholarships and grants received, a taxpayer should use their own financial records.

For questions on the amounts shown on Form 1098-T, contact the Student Business Online at 360-650-2865. Consult with your tax advisor for questions regarding eligibility requirements and calculation of any allowable education tax credit.

Students can access their 1098-T form online the Western Account Online.

Authorized payers can access the 1098-T form by logging into the Western Account Online and clicking the Tax Forms icon.

Former student and alumni can access their 1098-T by going to: MyWestern>Web4U>then click Login for Alumni/Former Employee

Box 1 - Box 1 shows the total payments received by an eligible educational institution from any source for qualified tuition and related expenses less any reimbursements or refunds made during the year that relate to those payments. For more information on the 1098-T, please visit the IRS website.

Box 2 & 3 – These boxes are reserved boxes.

· On electronic copies, both boxes should be blank.

· On paper copies mailed to the student, Box 2 should show "0.00" and Box 3 should be blank.

Box 4 – Adjustments made for a prior year

· This box shows the amount of any tuition and fees reductions or payment activity in the current calendar year for charges that were reported in a previous calendar year.

Box 5 – Scholarships or grants

· The figure in Box 5 includes scholarships, grants and, if applicable, payments made by a third party under formal billing arrangements (i.e. outside scholarships; employer provided educational assistance, regardless of taxability; military educational benefits payments; etc.) which have been administered by UVA.

Box 6 – Adjustments to scholarship or grants for a prior year.

· This box shows the amount of any scholarship, grant, and if applicable, third party reductions in the current calendar year for aid that was credited in a previous calendar year.

Box 7 – This box is checked if the amount in Box 1 includes payments towards qualified tuition and related expenses for an academic period beginning during the period of January 1 through March 31. For example, if you paid your spring term charges in November or December, this box should be checked.

Qualified tuition and related expenses (QTRE) are those that a student must pay that are within the IRS guidelines. This is a chart of Qualified Expenses vs. Not-Qualified Expenses for your reference. Only payments that pay QTRE will show in Box 1.

Qualified Expenses

·         Tuition

·         Mandatory Fees

·         Course Fees

·         Program Fees

·         Professional Program Fees

·         Enrollment confirmation fee

·         Distance learning fees

·         Information and technology fees

·         Exam fees (Math & Spanish placement test)

Non-Qualified Expenses

·         Housing

·         Meals

·         Field Trip Fees

·         Health Insurance

·         ID replacements

·         Student Health Center Fee

·         Transportation Fee

·         Key replacement

·         Late payment fees

·         Parking permits and citations

Yes. Section 6050S of the Internal Revenue Code, as enacted by the Taxpayer Relief Act of 1997, requires institutions to file information returns to assist taxpayers and the Internal Revenue Service.

The University generally provides the 1098-T form in an electronic format, and students consent to receiving this information when they assent to the Student Financial Responsibility Agreement. Consent to receive the form electronically, once given, will remain in effect for all future years in which the student is eligible to receive a 1098-T form.

Students who wish to rescind their consent to receive the 1098-T form online only must notify the Student Business Office in an email to from the student's Western email account. Requests received after January 1st each year will be applied to future tax years. If you withdraw online-only consent prior to January 1st, a paper copy will be mailed by January 31st to the student's permanent address on file, and the student and any authorized users will continue to have online access to the 1098-T information. In cases where consent to receive the form electronically is either not granted or is withdrawn, the student will receive a paper copy at the permanent home address as it is listed in Web4U. It is the student's responsibility to maintain accuracy of that address information.

American Opportunity Tax Credit

This tax credit applies to the first four years of post-secondary education. It is a tax credit of up to $2,500 of the cost of qualified* tuition and related expenses paid during the taxable year. The credit is based on 100% of the first $2,000, plus 25% of the next $2,000 of tuition, fees, and course materials paid during the taxable year.

*Qualified tuition and related expenses has been expanded to include expenditures for “course materials”
Eligibility is limited to taxpayers with adjusted gross income of $90,000 or less ($180,000 or less for joint filers)

Lifetime Learning Credit

The Lifetime Learning Credit may be claimed for the qualified tuition and related expenses of the students in the taxpayer’s family (i.e., the taxpayer, the taxpayer’s spouse, or an eligible dependent) who are enrolled in eligible educational institutions. The credit may be up to $2,000 for undergraduate, graduate and continuing education coursework taken to acquire or improve job skills.