Reporting of Tuition Payments

FORM 1098-T, TUITION PAYMENTS
The Taxpayer Relief Act of 1997 imposed information reporting requirements on organizations that receive payments of qualified tuition and related expenses.  The 1997 Act also required businesses, including State agencies, that reimbursed tuition to report the tuition reimbursements. For 1998, the IRS has dropped the requirement that employers report qualified tuition reimbursements; however, there is still reporting required of educational institutions that receive payments of qualified tuition.

By now most State universities have probably made significant progress in meeting the reporting requirements of Code Section 6050S for 1998 reporting.  In case any school is not aware of the reporting requirements the following is a recap of the Code Section 6050S reporting requirements for Tuition Payments as originally stated as set forth for 1998 reporting.

ORIGINAL REPORTING REQUIRMENTS
Section 6050S(b) provides that the return must be in the form prescribed by the Secretary and contain:

  1. the name, address, and taxpayer identification number (TIN) of the individual with respect to whom the qualified tuition and related expenses were received or the reimbursement or refund was paid,
  2. the name, address, and TIN of any individual named in the first item as the taxpayer who will claim that individual as a dependent for any tax year ending with or within the year for which the information return is filed,
  3. the aggregate amount of payments of qualified tuition and related expenses received by the eligible educational institution or the aggregate amount of reimbursements or refunds paid to the student, and
  4. such other information that the Secretary may prescribe.
Section 6050S(d) provides that every person required to make an information return must furnish to each individual whose name is required to be on the return a written statement showing the name, address, and phone number of the reporting person’s contact, and the aggregate amounts required to be included in the return.

FILING REQUIRMENTS FOR 1998
Eligible educational institutions that receive payments of qualified tuition and related expenses for 1998 are required to file Form 1098-Ts for each student.  Form 1098-T is not required if the institution makes reimbursements or refunds of tuition or related expenses that equal or exceed the payments that were made on behalf of the student.

Form 1098-T is also not required for students whose tuition was paid entirely with scholarships.

Persons, other than eligible educational institutions, engaged in a trade or business and making refunds of qualified tuition and related expenses are not required to file information returns for 1998.  This means that general government agencies making payments of qualified educational expenses under the State’s Section 127 plan will not have to file Forms 1098-T for 1998.

Educational institutions must provide reports on students who are enrolled in the institution for any academic term beginning in 1998.  The institution should determine its enrollment as of any of the following three dates:

  1. 30 days after the first day of the academic term;
  2. a date during the term on which enrollment data must be collected for purposes of the Integrated Postsecondary Data System administered by the Department of Education; or
  3. a date during the term on which the institution must report enrollment data to the State, the institution’s governing board or some other external governing body.
One Form 1098-T should be generated for each student regardless of the number of tuition payments made.

INFORMATION REQUIRED FOR 1998
Eligible educational institutions must file a properly completed Form 1098-T, Tuition Payments, for each student with respect to whom information reporting is required.  For 1998 the properly completed Form 1098-T must include:

  1. the name, address, and TIN of the eligible educational institution,
  2. the name, address, and TIN of the student,
  3. an indication of whether the student was enrolled for at least half the full-time academic workload during any academic period commencing in 1998, and
  4. an indication as the whether the student was enrolled exclusively in a program or programs leading the a graduate level degree, graduate level certificate, or other recognized graduate level educational credential.
When to File, Manner of Filing, Statements to be Provided to the Student
The Forms 1098-T must be sent to the IRS by March 1, 1999.  The forms may be filed on paper or magnetically.

Each student must be provided a statement containing the same information that is provided to the IRS.  In addition, the form to the student must contain the phone number of the person to contact for information about this return.  The form to the student must be provide by February 1, 1999.

New IRS Form W-9S can be used to obtain the student’s name, address, TIN, and other information required
 

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