Bursar/Student Accounts > Lifetime Learning & Hope Credits / Form 1098T

Lifetime Learning & Hope Credits / Form 1098T

This material is provided as a service to State University at Stony Brook students and families to assist them in understanding the new higher education tax credits. The information offered here is not tax advice.

IRS Tax Benefits for Education
IRS Taxpayer Advice by Telephone: 1-800-829-1040, Monday through Friday, 07:30AM - 05:30PM (hours in Alaska and Hawaii may vary).
Personal Student Payment Information through the SOLAR System; look under Student Financial Services > Tax Relief Disclosure Form.

Disclaimer

This material has not been approved by the IRS or the U.S. Treasury and is not an official document. It is offered as a service to the Stony Brook University students and families. This is not an official form nor does it necessarily represent official policy of the State University of New York. This material has not been reviewed or approved by an attorney.

What is the Lifetime Learning Tax Credit?

IRS Information about Lifetime Learning Credit

The Lifetime Learning Tax Credit is a federal income tax credit that is equivalent to 20% of the first $10,000 paid "out of pocket qualified tuition and related expenses" (see definition), up to a $2,000, and non refundable (it is subtracted from the taxes you owe you cannot claim a credit for more than you owe in taxes; you cannot file a tax return solely to claim this credit).

Which students may qualify for a Lifetime Learning Tax Credit?

Students who:

are college juniors, seniors, graduate, and professional degree students, including adults returning to college;
are enrolled in at least one course leading to a degree, certificate, or improved job skills;
made "out of pocket payments during the tax year for qualified tuition and related expenses" (see definition) for periods of enrollment occurring within the tax year or during the first three months of the subsequent tax year.

NOTE: Information about the HOPE Scholarship, which applies to students enrolled in the first two years of post-secondary education, follows below.

Am I eligible to take the Lifetime Learning Tax Credit if I take courses in a non-degree program?

Amounts that students pay for tuition and related fees may qualify for the Lifetime Learning Tax Credit even if the course is part of a non-degree program. However, the course(s) must be taken by the student to acquire or improve job skills.

What are the "Out of Pocket Payments for Qualified Tuition and Related Expenses"?

"Out of Pocket Payments for Qualified Tuition and Related Expenses" are payments made to a college for fees and tuition (not including the cost of books and supplies) and other academically related activities (not including gym, student government, health or student activities fees), minus any "untaxed educational benefit" (e.g., most grants, scholarships, fellowships, and fee waivers).

It is important to note that the new law requires all nontaxable scholarships and grants to be deducted from the qualified tuition and expenses paid, before a tax payer may claim a HOPE Scholarship or Lifetime Learning tax credit.

Who can claim a Lifetime Learning Tax Credit?

Taxpayers who:

are students not claimed as dependent on anyone else's tax return;
are non-students entitled to claim the student as a tax dependent;
do not have an adjusted gross income greater than $42,000-$52,000 for single filers or $85,000-$106,000 for couples filing jointly; and
have not already claimed more than a total of $2,000 for the Lifetime Learning tax credit in the same tax year.

What is a HOPE Scholarship?

IRS Information about HOPE Scholarship

The HOPE Scholarship is actually a federal Income tax credit that is similar to the Lifetime Learning Tax Credit described above except that it is: equivalent to 100% of the first $1,100 of out of "Out of Pocket Payments for Qualified Tuition and Related Expenses" and 50% of the second $1,100, for a maximum of $1,650.

Which students may qualify for a HOPE Scholarship?

Students who meet the standards for a Lifetime Learning tax credit and in addition:

have not yet completed their second year in college as of the start of the tax year;
are enrolled at least half-time during at least one quarter in the tax year; and,
are enrolled in a course of study leading to a degree or a recognized certificate.

Who can claim a HOPE Scholarship?

Taxpayers who meet the standards for claiming a Lifetime Learning tax credit. A HOPE Scholarship is available to each qualifying student, even if there is more than one in the taxpayer's family during the same tax year.

Can I claim both a Lifetime Learning Tax Credit and a HOPE Scholarship in one tax year?

Taxpayers cannot claim both a HOPE Scholarship and a Lifetime Learning tax credit for the same student in the same tax year. However, the two credits can be claimed simultaneously for different qualifying students in the same tax year. For example, in a family where two children are in college simultaneously, on student may qualify for the HOPE Scholarship while the other may qualify for the Lifetime Learning tax credit. In such a case, the parents (taxpayers) may claim both a HOPE Scholarship and a Lifetime Learning tax credit on their tax form.

How will I know how much I have paid in "Out of Pocket" qualified tuition and related expenses each year?

If, based on the information available to us, you have made any out of pocket payments for qualified tuition and related expenses, SBU will make this information available to you each year by February. It is up to the taxpayer or his or her tax advisor to determine if the amounts paid will make the taxpayer eligible to claim or more credits in any tax year. This includes payments made at all schools attended by all eligible family members.

For tax year 2008, information will be available for the student through the SOLAR System; under Student Financial Services > Tax Relief Disclosure Form.

What about payments made with student loans?

Payments paid with proceeds from student loans are considered the same as cash payments and will count as "out of pocket" payments for qualified tuition and related expenses. If you paid for a portion of your qualified expenses using scholarships or grants, those are not considered "out of pocket" payments.

If the information supplied by the Stony Brook University indicated that I paid a certain amount in tuition and fees, does that mean I can claim that amount for a tax credit?

Not necessarily. It is very important that taxpayers first obtain advice from a qualified tax advisor. There may be some circumstances that could affect an individual's eligibility to claim an educational tax credit, such as:

the student may have received nontaxable grants or scholarships of which the university has no knowledge;
the taxpayer may be required to pay an alternative minimum tax, or other special circumstances that could make the taxpayer ineligible (e.g., we will not know if the student/taxpayer earns too little or too much to be eligible, may not know of a relevant felony drug conviction, may not know if the student has already exceeded the "first two years of post-secondary education," or if the student attended other eligible institutions).

Do I have to do anything now?

You must keep the university's Registrar's Office informed of your correct name, social security number and address for tax reporting purposes. If you move or change your name between now and next February, you must keep the school apprised of your new name or address.

In future years, you may be required to provide additional information, such as the name, address, and social security number of the person eligible to claim you each year as tax dependent. When the time comes, Stony Brook University will provide a form so that the taxpayer can let the University know the relevant information for tax reporting purposes.

IT IS IMPORTANT TO NOTE that payment of "qualified tuition and related expenses" is only one of several criteria considered when determining eligibility for either tax credit.

What is Form 1098-T?

The University is required to furnish Form 1098-T to all students that incurred qualified tuition and related expenses during 2008. This information will help alert the student, or the person that claims the student, that there is a possibility of being eligible to claim the Hope Scholarship or Lifetime Learning Tax Credit.

Box 2 shows the total amounts billed for qualified tuition and related expenses less any reductions in charges. Qualifying expenses at Stony Brook include tuition, college fee, athletic fee, student activity fee, technology fee and course fees. Non qualifying expenses are the transportation fee, infirmary fee, insurance, bookstore plan, room, apartment, and meal plan.

Box 5 shows the total of all scholarships or grants administered and processed. These amounts include federal and state grants such as Pell, SEOG, TAP as well as tuition waivers and graduate tuition scholarships. The amount of scholarships or grants may reduce the amount of any allowable tuition and fees deduction or education credit you may claim for the year.

Box 8 shows whether the student is considered to be carrying at least one-half the normal full-time workload for a course of study at the university. If the student is at least half-time within the first two years of post-secondary education, than one of the requirements of the Hope Scholarship is met.

Box 9 shows whether the student is considered to be enrolled exclusively in a program leading to graduate-level certificate or degree. Students enrolled exclusively in a graduate program only may qualify for the lifetime learning credit.

This tax information about enrollment is being furnished to the Internal Revenue Service. Please be aware, however, that the university is not responsible to determine a student´s eligibility or to calculate any education credit that may be claimed.

IRS Publication 970 explains qualifying tuition and fees, and payments. To receive the HOPE Credit or Lifetime Learning Credit, you must account for and document the amount you have paid for tuition and expenses on IRS Form 8863 and file with your 2008 federal tax return. You do not file Form 1098-T with your tax return.

Where can I access my payment information?

Your personal statement of payments for qualified tuition and related expenses, and grants, scholarships and fellowships, for the 2008 tax year will be available through the SOLAR System; under Student Financial Services > Tax Relief Disclosure Form. SOLAR kiosks are available in the Student Services Lobby in the Administration Building.

Your 9-digit Stony Brook ID and SOLAR password are required. Your Tax Relief Financial Disclosure Information for 2008 will be displayed by clicking Student Financial Services > Tax Relief Disclosure Form. Qualifying Charges Paid, Total Fees Paid and Total Grants and Scholarships for the periods of January 1 to June 30, and July 1 to December 2008 will be displayed to assist you in determining your tax credit, if any. This information can be used to assist the taxpayer in calculating his or her out of pocket expenses, since for the tax year 2008, the taxpayer will be responsible to calculate out of pocket expenses. According to the IRS, the University is not responsible to determine a student's eligibility or out-of-pocket payments on qualified tuition and fees for the 2008 tax year.

The Stony Brook University Tax Hotline (631) 632-1399 is provided as a service to State University at Stony Brook students and families to assist them in understanding the higher education tax credits for the 2008 tax year. Staff in the Student Account Office can help you identify your payments made but to determine your eligibility or the amount of your tax credit, we advise you to contact a tax professional.