What Is Form 1098-T? — Your Key to Claiming Education Tax Credits (2025)

What Is Form 1098-T? — Your Key to Claiming Education Tax Credits (2025)

If you or your dependent is enrolled in a U.S. college or university, you’ll receive Form 1098-T each year.
This form isn’t just a receipt—it’s the IRS document used to claim major education benefits such as the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC).
Here’s a clear breakdown of what Form 1098-T shows, how to read Box 1 and Box 5, and how it determines your eligibility for education credits.

What Is Form 1098-T?

Form 1098-T is a tuition statement issued by eligible U.S. educational institutions.
The school reports the amount of qualified tuition you paid during the year
and the amount of scholarships or grants you received.
While you don’t submit the form itself to the IRS, the information on it is required
to claim the AOTC or LLC.

Key Parts of Form 1098-T

• Box 1 — Payments received for qualified tuition and related expenses
• Box 5 — Scholarships and grants reported by the school
• The difference (Box 1 – Box 5) helps determine how much of your expenses qualify

What Tax Benefits Does Form 1098-T Support?

This form is used to determine eligibility for two major education credits:

• American Opportunity Tax Credit (AOTC) — Up to $2,500 per student
• Lifetime Learning Credit (LLC) — 20% credit on up to $10,000 of expenses

Note that only qualified education expenses count toward these credits—
not room, board, insurance, transportation, or personal expenses.

Frequently Asked Questions

1) What if I didn’t receive a 1098-T?
You may still claim the credit if you can obtain a tuition statement or billing record from your school.

2) Can international students claim AOTC or LLC?
Most nonresident aliens (NRA) are not eligible for these credits.

3) Is scholarship income always tax-free?
No. Scholarship amounts not used for tuition or required fees may be taxable.

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