Tax Benefits for Education

The Taxpayer Relief Act of 1997 provides students with tax incentives to help finance their college education.

Information regarding these tax benefits, IRS form 1098T, will be mailed to eligible Stonehill students in January of each year for the prior tax year.

Student Financial Services staff members are not tax professionals and given the complexity of the tax code, we unfortunately cannot provide tax advice or determine your eligibility for education tax benefits. We can provide you with information about your Stonehill account, which you may need to determine your eligibility for tax benefits.

Detailed account information is available through myHill, myServices, myBill. Many students and families report that in order to determine their education tax benefit eligibility, they need 1098-T statements from the current and prior calendar years and records of other qualified expenses and records of payments made. For more information, we encourage you to see IRS Publication 970, or consult your tax advisor.

Click here for FAQs and other information regarding your 1098-T.

American Opportunity Credit

  • provides up to $2500 in tax credits for eligible expenses
  • tax credit equals 100% of the first $2000 and 25% of the next $2000 of qualified expense paid for each eligible student
  • student has not completed the first 4 years of postsecondary education as determined by the eligible educational institution
  • student enrolled in a program that leads to a degree, certificate, or other recognized educational credential
  • student taking at least one-half the normal full-time workload for his or her course of study for at least one academic period during the tax year
  • student has not been convicted of a felony for possessing or distributing a controlled substance
  • phased out for higher income brackets

Lifetime Learning Credit

The Lifetime Learning Credit provides up to $2000 in tax credits for tuition and fees required for enrollment

  • may be claimed annually (without limits) for such expenses paid during the tax year for ALL eligible students on a tax return who are enrolled in eligible institutions
  • tax credit equals 20% of the first $10,000 paid for all eligible students in the family
  • tax credit can be claimed by the student or by the taxpayer who claims the student as a dependent on his/her federal tax return
  • for students at any level of postsecondary education, even graduate school, whether the student is taking 1 course or more per semester or year student need not be working towards a particular degree or certificate
  • phased out for higher income brackets
  • can be claimed only if for student is not eligible for the American opportunity in the same tax year

Higher Education Tuition & Fees Deduction

Taxpayers not eligible for Lifetime Learning Credit may be eligible for the Higher Education Tuition and Fees Deduction. You claim the deduction by completing Form 8917 and submitting this along with your 1040 or 1040A. The deduction for tuition and fees will be claimed on Form 1040, line 34, “Tuition and fees deduction” or on Form 1040A, line 19.

Note: The information published here was taken from the Instructions for IRS Form 8863.

IRS Form 1098-T and Educational Tax Credit Information

What is IRS Form 1098-T?

A 1098-T is a statement of qualified tuition and related expenses that were billed to your student account and grants or scholarships received during the calendar year. The 1098-T does not indicate your eligibility for tax benefits; rather, it provides you with information about your account which you or your tax preparer may use to determine your education tax benefit eligibility.

Why didn’t I receive a 1098-T?

A 1098-T is not issued if the grants and scholarships received for your account in the calendar year exceed the eligible charges for which you were billed in that calendar year and no information previously reported has been adjusted.

I graduated last May, shouldn’t I have received a 1098-T for the tuition charges for my final spring semester?

The 1098-T contains information about eligible charges by calendar year. If you registered for spring 2013 semester courses in November of 2012, the charges for these courses were billed in November of 2012 and were, therefore, reported on your 2012 1098-T. Since the I.R.S. operates on a calendar year, and the College operates on an academic year, many students will need both their 2012 and 2013 1098-T information in order to determine their tax benefit eligibility for their 2013 Federal Income Tax Return.

Why are three semesters of scholarships and grants showing in box 5?

In 2013 Stonehill adjusted when some scholarships and grants are paid to student accounts.  Reflected in Box 5 are awards for spring 2013, fall 2013, and spring 2014.  Keep in mind that chances are your first year 1098T reflected two semesters of tuition and only one semester of scholarships and grants.

I made a payment in 2013, why is Box 1 blank?

Colleges and Universities may choose to report either “Payments received for qualified tuition and related expenses” in Box 1 of the 1098-T or “Amounts billed for qualified tuition and related expenses” in Box 2 of the 1098-T. Stonehill reports qualified amounts billed in Box 2. As a result, nothing will be reported in Box 1 of your 1098-T. Your eligibility for tax benefits is not impacted by whether a university reports amounts paid in Box 1 or amounts billed in Box 2.

Why are two semesters of tuition charges showing in Box 2? I only attended one semester in 2013?

The charges billed reported in Box 2 reflect charges for which you were billed during the calendar year – regardless of the semester to which those charges apply. Stonehill bills students for spring tuition and fees in December, in advance of the spring semester.

Why are the eligible charges listed on my 1098-T less than what I was actually billed by Stonehill?

Not all charges are considered eligible by the I.R.S. For example, room and board charges are not considered eligible charges by the I.R.S. Your 1098-T will reflect only eligible charges for which you were billed.

What tax benefits am I eligible for?

The 1098-T does not indicate your eligibility for tax benefits. You may be eligible for certain tax incentives even if you are not issued a 1098-T. You may receive a 1098-T but not qualify for education tax benefits. The 1098-T provides information that you may use to determine your eligibility for tax incentives. For assistance in determining your eligibility for education tax benefits, consult I.R.S. Publication 970(PDF) and/or your tax preparer.