American Opportunity Tax Credit
The American Opportunity Tax Credit (AOTC) is a tax credit available to eligible students and their families to help cover qualified education expenses incurred during the first four years of higher education. It was introduced as part of the American Recovery and Reinvestment Act of 2009 and has been extended several times since.
Key features of the American Opportunity Tax Credit include:
1. **Eligibility Criteria:**
– Available to students pursuing a degree or other recognized education credential.
– Applies to the first four years of post-secondary education.
– Must be enrolled at least half-time for at least one academic period during the tax year.
– Income limits apply to claim the full credit; it phases out for higher income levels.
2. **Credit Amount:**
– The credit covers 100% of the first $2,000 of qualified education expenses and 25% of the next $2,000 (for a total maximum credit of $2,500 per eligible student).
3. **Qualified Expenses:**
– Includes tuition, fees, and course materials required for the course of study.
– Some expenses, such as room and board, insurance, and transportation, do not qualify.
4. **Refundable Credit:**
– Up to 40% of the credit (up to $1,000) is refundable, meaning that even if the tax liability is zero, the taxpayer may receive up to $1,000 as a refund.
5. **Limitations:**
– The credit is subject to income phase-outs, meaning it gradually reduces for taxpayers with a modified adjusted gross income (MAGI) above certain thresholds.
– It cannot be claimed by married individuals filing separately.
– The student must not have any felony drug convictions.
The AOTC is a significant tax benefit for many students and families, helping to offset the costs of higher education. It’s important to carefully review the eligibility criteria and ensure that all qualified education expenses are properly documented when claiming this credit on tax returns.
1098-T Frequently Asked Questions
1098-T forms are issued by the University to students that incurred a net payment of qualified tuition and fees during a given calendar year. This form is to be used by the student to determine eligibility to receive the American Opportunity Credit or Lifetime Learning education tax credits.
All students will receive a paperless 1098-T unless they have opted to receive a printed form. If you feel it is necessary to have a paper form mailed to you, please go to EagleNet and browse to Student/Student Account/Manage Paperless 1098-T Options. We transmit the same information electronically to the IRS. Paper forms will be sent based on the following address hierarchy: permanent (1st), parents (2nd), billing (3rd), mailing (4th), then housing (5th).
There are several reasons you may not have received a 1098-T. The most common reason is that your scholarships and grants exceeded your qualified tuition and fees for the year. If this is the case, no 1098-T will be generated. If you believe the 1098-T was sent to an incorrect address you can log into your EagleNet account and reprint the form under View or Print 1098-T Tax Form.
Log into EagleNet to access a digital copy by browsing to Student/Student Account/View or Print 1098-T Tax Form.
Qualified expenses would include state support and self-support tuition, course fees, and the technology fee. Fees that are excluded include the transportation fee, comprehensive health fee, application fees, housing and dining, parking, administrative fees and fines, and non-credit tuition.
Internal and external scholarships, tuition waivers, grants (federal and state), exemptions and third party payments from vendors such as the Department of Veterans Affairs, Department of Labor and Industries, and employer assistance would be included in scholarships and grants and would reduce the amount of eligible expenses that can be reported. Student loans are considered your payments and are not deducted from the tuition costs that can be reported.
We are required to have 1098-T information available by January 31st. We will notify students by email when the information is available on EagleNet.
For calendar year 2023 Eastern Washington University will report Quarters; Winter 2023 (but only for payments made in 2023), Spring 2023, Summer 2023, and Fall 2023, and Winter 2024 (but only for payments made in 2023). Semesters; Spring 2023(but only for payments made in 2023), Summer 2023, Fall 2023, and Spring 2024 (but only for payments made in 2023).
This information is part of the student’s private educational records which are protected by federal privacy laws. We are unable to disclose information to anyone without written consent by the student. If a student wishes to release this information they will need to go to Student Financial Services and complete a Release of Information form.
Prior to calendar year 2018, EWU elected the option to report amounts billed. For calendar year 2018 forward, EWU reports amounts paid in Box 1.
The form contains several boxes, each representing specific information relevant to educational expenses and potential tax benefits. Here’s an overview of the boxes on Form 1098-T:
Box 1: Payments Received for Qualified Tuition and Related Expenses
– This box shows the total amount of payments received by the institution for qualified tuition and related expenses during the calendar year. This includes tuition, fees, and other related expenses, but it might not necessarily match the amount the student actually paid.
Box 2: Amounts Billed for Qualified Tuition and Related Expenses
– This box reports the total amount billed for qualified tuition and related expenses during the calendar year. It may include charges for future academic periods that were billed in the current tax year.
Box 3: Check if Change in Reporting Method
– A checkmark in this box indicates a change in the reporting method from the previous year.
Box 4: Adjustments Made for a Prior Year
– This box shows any adjustments or reductions in amounts reported for a previous year. For instance, if a student’s expenses were credited back to the institution, this box might reflect that adjustment.
Box 5: Scholarships or Grants
– This box displays the total amount of scholarships or grants administered and processed by the educational institution during the calendar year. It might include both payments and adjustments made during that time.
Box 6: Adjustments to Scholarships or Grants for a Prior Year
– Similar to Box 4, this box reports any adjustments or reductions made to scholarships or grants reported in a previous year.
Box 7: Checkbox for Amounts for an Academic Period Beginning in the Next Calendar Year
– This box is checked if any of the amounts in Box 1 or 2 relate to an academic period that begins in the following calendar year.
Box 8: Check if at Least Half-Time Student
– A checkmark in this box indicates if the student was enrolled at least half-time during any academic period that started during the year.
Box 9: Check if a Graduate Student
– This box is checked if the student is considered a graduate student.
These boxes provide information relevant to claiming education-related tax credits, such as the American Opportunity Tax Credit or Lifetime Learning Credit. However, not all boxes may contain entries, as it depends on the specific information provided by the educational institution. Students should use this form, along with additional records of their educational expenses, when preparing their tax returns.
