General Taxpayer Relief Act of 1997
Education Tax Credit
On August 1997, the Taxpayer Relief Act of 1997 (TRA97) was signed into law. This law established the Hope and Lifetime Learning Tax Credits and a deduction for student loan interest. Whether a taxpayer may take advantage of these benefits depends on the taxpayer's individual facts and circumstances.
In 2009, the American Recovery and Reinvestment Act of 2009 (ARRA) was signed into law. Under the ARRA, the American Opportunity Tax Credit (AOTC) modified the existing Hope and Credit for tax year 2009 and 2010. The AOTC was established to help students pay for college and college-related expenses. The credit was extended two additional years until Dec. 31, 2012 by the Tax Relief and Job Creation Act of 2010.
The following information is being provided to assist in determining whether an income tax credit may be available to you. This information should not be construed as tax advice.
American Opportunity and Lifetime Learning Tax Credits | Resources | Frequently Asked Questions | Disclaimer
American Opportunity and Lifetime Learning Tax Credits
Source: NACUBO: Paying for College: Tax Benefits and Savings Options and IRS Publications 970: Tax Benefits for Education
The American Opportunity Credit provides up to $2,500 per student for qualified tuition and related expenses for the first four years of postsecondary education.
To be eligible, students must be enrolled at least halftime for the course of study he or she is pursuing for at least one academic period during the calendar year.
The Hope Tax Credit is not available for 2011
The Lifetime Learning Tax Credit applies to qualified tuition and fees for undergraduate, graduate, and continuing education course work at an eligible education institution. It provides a credit equal to 20 percent of qualified expenses of no more than $10,000 per family taxpayer, not per student, resulting in a $2,000.00 maximum tax credit. Eligible education expenses are offset by scholarships, grants, and other tax-free tuition benefits.
Allowable Education Credits. The American Opportunity Credit is limited to individuals with modified adjusted gross income (MAGI) of $90,000 or less ($180,000 or less for joint filers).The Lifetime Learning Credit are limited to individuals with modified adjusted gross income (MAGI) between $51,000 and $61,000 ($102,000 and $122,000 if filing a joint return). Please refer to General Instructions Form 8863 Education Credits (American Opportunity and Lifetime Learning Credits) for Allowable Education Credits IRS Form 8863: Education Credits.
IRS Form 1098-T: Tuition Statement
An eligible educational institution, such as The University of Texas Rio Grande Valley, that receives qualified tuition and related expenses on a student's behalf, must furnish form 1098-T to the student. Receipt of form 1098-T does not indicate eligibility for the tax credit. The form 1098-T is not required to be attached to the taxpayer's tax return.
The University of Texas Rio Grande Valley will send a form 1098-T to students who incurred tuition and fee expenses for a calendar year, or had an adjustment to amounts billed or scholarships received in a prior year, by January 31st of the following year. It will be mailed to the student's permanent address as it appears in the Student Information System. Students are encouraged to update their address on the student website ( my.utrgv.edu) to their current address.
The following information must be included on the Form 1098-T and reported to the IRS:
- Qualified tuition and related expense (QTRE) amounts are reported in Box 2 (Box 1 is not used)
- Box 3 should be blank.
- Box 4 is for adjustments made to QTRE for a prior year.
- Total scholarships/grants are reported in Box 5
- Box 6 is for adjustments to scholarships/grants made for a prior year.
- Box 7 is checked if amounts billed are for an academic term beginning in January (Spring Term).
- Box 8 is checked if enrolled at least half-time for a semester during the year.
- Box 9 is checked if a Graduate Student
- The name, address, and taxpayer identification number (TIN) of the institution.
- The name, address, and TIN (social security or individual taxpayer identification number) of the
student. - An indication whether the student was enrolled for at least half-time for the course of study he or
she is pursuing for at least one academic period during the calendar year (Box 8) - An indication whether the student was enrolled in a program leading to a graduate-level degree,
certificate, or other graduate-level educational credential (Box 9)
1098-T's are not generated for the following individuals:
- individuals whose scholarships/grants were equal to, or greater than, qualified tuition and related expenses. Generally, students who have qualified tuition and related expenses that are paid in their entirety by scholarships/grants, are not eligible for an education tax credit. individuals who were enrolled in courses that did not earn academic credits.
- individuals who were not enrolled during the calendar year.
STUDENT LOAN INTEREST DEDUCTION
Taxpayers who have taken loans to pay qualified higher education expenses for themselves, their spouse, or their dependent may be able to deduct interest paid on these student loans.
IRS Form 1098-E: Student Loan Interest Statement
Any lender that receives interest payments on qualified education loans totaling $600.00 or more from a single borrower during a calendar year must file an information return with the IRS with respect to the borrower and furnish a statement to the borrower. The form 1098-E is not required to be attached to the taxpayer's tax return.
The following information must be included on the form 1098-E:
- The name, address, and TIN of the lender.
- The name, address, and TIN of the borrower.
- The aggregate amount of interest payments received during the calendar year from the
borrower.
The University of Texas Rio Grande Valley will mail a form 1098-E to the borrower's current billing address by January 31st of each year only if borrower's interest payment exceeded $600.00 in one calendar year.
Resources
The University of Texas Rio Grande Valley has compiled a list of resources that may assist you in determining whether you are eligible for any tax credit or loan deduction expense. This information is not intended as legal or tax advice.
- IRS Publication 970: Tax Benefits for Higher Education
- IRS Publication 17: Your Federal Income Tax for Individuals
- IRS Form 8863: Education Credits
- NACUBO: - Paying for College: Tax Benefits and Savings Options
Frequently Asked Questions
You received a 1098-T Tuition Payments Statement because you enrolled at UTRGV and were billed for qualified tuition and related expenses for the calendar year, or there was an adjustment for amounts billed or scholarships received in a prior year.
You received a 1098-E Student Loan Interest Statement because UTRGV received $600.00 or more of interest payments from you during the calendar year
Whether you qualify or not for a tax credit, or interest deduction, depends on the taxpayer's individual facts and circumstances. A taxpayer may receive a 1098-T and not be able to claim an education tax credit. A taxpayer may receive a 1098-E and not be eligible to take the interest deduction. To find out more about the tax credits and interest deductions, consult a tax professional or access IRS 6/26/2020 Education Tax Credit publications https://www.irs.gov/formspubs/index.html. IRS publications and forms can also be ordered by calling 1-800-TAX-FORM (1-800-829-3676)
Institutions must furnish 1098-T's to individuals on or before January 31 of the year following the calendar year in which tuition was billed. Statements will be mailed to the student's permanent address as it appear in the Student Information System. Students are encouraged to update their address on the student website (my.utrgv.edu) to their current address.
Lenders must furnish 1098-E's on or before January 31 of the year following the calendar year in which payments of interest on a qualified education loan were received. They will be mailed to the borrower's current billing address.
There are certain situations where a 1098-T was not generated. Under IRS rules, reporting requirements do not apply to:
- any individual who is enrolled only in courses for which no academic credit is earned.
- individuals whose scholarships/grants were equal to, or greater than, qualified tuition and related expenses. Generally, students who have qualified tuition and related expenses that are paid in their entirety by scholarships/grants, are not eligible for an education tax credit.
- an individual who had no enrollment hours for the calendar year.
To process a 1098-T for a student with a temporary student identification number complete IRS Form W-9S, Request for Student's or Borrower's Taxpayer Identification Number and Certification. This form can be downloaded from https://www.irs.gov/formspubs/index.html or by calling 1-800-TAX-FORM.
The completed W-9S form can be mailed to:
The University of Texas Rio Grande Valley
ATTN: Payroll Tax Office
1201 West University Drive
Edinburg, TX 78539
or it can be delivered to the Payroll Tax Office located at AB221.
Billing statements may be accessed:
- via https://my.utrgv.edu, select ASSIST > My Finances > Online Student Bill
- via any ASSIST Kiosk Information station on campus. A student ID and PIN are required.
If scholarships or grants are not reflected in billing statements and a record is needed, the department which processed the award will need to be contacted.
Disclaimer
THE INFORMATION PROVIDED IN THIS WEBSITE IS NOT INTENDED AS LEGAL OR TAX ADVICE. INDIVIDUALS SHOULD OBTAIN IRS PUBLICATION 970, TAX BENEFITS FOR HIGHER EDUCATION, OR CONTACT A TAX PRACTITIONER ABOUT PERSONAL INCOME TAX SITUATIONS.