1098-T Boxes Explained: Tuition, Scholarships and Gaps

The 1098-T boxes explained: Box 1 is payments the school received for qualified tuition in the calendar year, Box 5 is scholarships and grants it processed, and Boxes 4 and 6 adjust earlier years. Boxes 7 to 9 are checkboxes; Box 10 is insurer refunds. Schools report by payment date, so Box 1 rarely equals the family's bills.

The 1098-T boxes explained, Box 1 to Box 10

The 1098-T boxes, explained in order, report what an eligible school received and processed for one student in one calendar year. The IRS Instructions for Forms 1098-E and 1098-T (2026) define each box. Boxes 2 and 3 are reserved, so a current form uses eight of the ten.

Box 1 is the main figure. The instructions say it is "the total amount of payments received for qualified tuition and related expenses from all sources during the calendar year," less refunds and reimbursements of those same-year payments. They add that it "is not reduced by scholarships and grants reported in box 5." Box 5 is "the total amount of any scholarships or grants that you administered and processed during the calendar year for the payment of the student's costs of attendance."

The same instructions define what counts. Qualified tuition and related expenses "are tuition, fees, and course materials required for a student to be enrolled at or attend an eligible educational institution." Room, board, insurance, medical expenses "(including student health fees)" and transportation are excluded.

Table: each 1098-T box and the record to request

The example values below are for a fictional student, Maya Example, at Example State University, student account XXXX-4821, on a 2026 form.

The table is a request list, not a calculation. Each supporting document answers a question the form leaves open.

Why does 1098-T Box 1 not match what the family paid?

1098-T Box 1 does not match what the family paid because it counts payments the school received in the calendar year, not the bills for the year's terms. A spring term paid in December lands in the earlier year. Fees that do not qualify, such as housing and health fees, are left out entirely.

IRS Publication 970 (2025) says it directly: "the amount on Form 1098-T might be different from what you paid. When figuring the credit, use only the amounts you paid or are deemed to have paid in 2025 for qualified education expenses." The form is a starting point, and the family's own payment history is the record that counts.

Several ordinary events push the two apart:

• Payment timing. Box 1 follows the date money reached the school. A November bill paid on January 3 belongs to the later year.
• Excluded charges. The statement the family sees includes housing, meal plans and health fees. The instructions exclude those from qualified expenses, so they never reach Box 1.
• Refunds. A refund of same-year tuition reduces Box 1. A refund of a payment reported last year shows in Box 4 instead.
• Past-due balances. The instructions say Box 1 includes "a payment of past-due qualified tuition or related expenses from a previous calendar year, but only if the educational institution previously billed the student."
• Course materials bought elsewhere. Books from an outside store never pass through the school's account.

In the table's example, Box 1 is $14,200.00. The family's own records, reviewed with the account statement, might show $9,800.00 paid in 2026 for the fall term and $4,400.00 paid on December 18 for spring 2027, which together make the $14,200.00. The December payment is why Box 7 is checked.

The 1098-T Box 7 checkbox and the next academic period

The 1098-T Box 7 checkbox says Box 1 includes payments for a term that begins in January, February or March of the next year. The 2026 instructions tell schools to check it if any 2026 payments "relate to an academic period that begins in January through March of 2027." It flags a December payment for spring.

The checkbox matters because a separate rule lets those early-term payments count in the year paid. Publication 970 (2025) says that for 2025 returns a taxpayer can "treat an academic period beginning in the first 3 months of 2026 as if it began in 2025." The same structure applies each year, with the dates moved forward.

The consequence shows up a year later. If December's spring payment was counted on this year's return, next year's Box 1 will not include it, and next year's return should not count it again. A checked Box 7 is a note to look at last year's file before using next year's form. The prior-year return as a checklist approach covers how last year's file guides this year's requests.

Scholarships in 1098-T Box 5 larger than Box 1

Scholarships in 1098-T Box 5 larger than Box 1 mean the student received more aid than the school recorded in qualified payments. Publication 970 says a scholarship is tax free only to the extent it does not exceed qualified education expenses and is not earmarked for items such as room and board. The excess can be taxable to the student.

Publication 970 sets the conditions. A scholarship "is tax free (excludable from gross income) only if you are a candidate for a degree at an eligible educational institution," and only to the extent that "It doesn't exceed your qualified education expenses" and "It isn't designated or earmarked for other purposes (such as room and board)."

The taxable part goes on the student's own return. Publication 970 says a taxable amount reported in box 1 of a W-2 goes on line 1a, and any taxable amount not on a W-2 goes on Schedule 1 (Form 1040), line 8r. A student with a large grant and no job can therefore have scholarship income with no W-2 behind it.

The edge case has a twist. Publication 970 notes that a family "may be able to increase the combined value of an education credit and certain educational assistance if the student includes some or all of the educational assistance in income in the year it is received." Whether that helps depends on the whole household and is the preparer's call. The records needed to decide it are the award letters showing any restrictions on how each scholarship may be used.

What records back up the 1098-T besides the form?

The records that back up the 1098-T besides the form are the student account statement, the payment history showing dates and payers, the scholarship award letters, and receipts for required course materials bought outside the school. Together they show what was actually paid, when, and for which term.

Student account statement. This is the school's ledger of charges and credits. It separates tuition from housing and fees, which the 1098-T does not show.

Payment history. The dates matter more than the totals, because Box 1 runs on payment dates. The history also shows who paid: a parent, the student, a 529 plan or a loan disbursement.

Award letters. Each scholarship's terms show whether it was restricted to tuition or open to other costs. Box 5 covers aid the school "administered and processed," so an outside scholarship paid to the student directly may not appear there at all.

Course material receipts. Publication 970 says qualified expenses for the American opportunity credit include "course materials that the student needs for a course of study whether or not the materials are bought at the educational institution." A receipt and a syllabus showing the book was required are the support.

A school may not send a 1098-T at all. The 2026 instructions list exceptions, including courses with no academic credit, students whose qualified expenses are "entirely waived or paid entirely with scholarships," and certain formal billing arrangements with an employer or a government agency. A missing form is a question for the school, not proof that nothing was paid.

Claiming the 1098-T on both the parent's and the student's return

Claiming the 1098-T on both the parent's and the student's return is a double claim the rules do not allow. Publication 970 says either the parent or the dependent student, "but not both of you," can claim an American opportunity credit for that student's expenses. Who claims follows the dependency decision, not whose name is on the form.

Publication 970's table puts it plainly. If a parent claims a dependent who is an eligible student, "you can claim the American opportunity credit based on that dependent's expenses. The dependent can't claim the credit." If the parent does not claim the student as a dependent, even when entitled to, "the dependent can claim the American opportunity credit." The same publication says expenses paid by a dependent the parent claims are "considered paid by you."

A double claim can happen when the student files a separate return and uses the 1098-T issued in the student's name. The parent's preparer may never see that return. A short question on the parent's organizer, asking whether the student filed and whether that return used the 1098-T, closes the gap.

Education paperwork arrives in pieces from the school, the student and the parents. Schema CPA gives each client one upload link and sets the checklist from last year's return, so pieces sent by different family members land in one file. The client tracker demo shows what that looks like, and firms can get started on the Free plan.

The 1098-T shares a number with the lender's form; the boxes on that one are covered in the 1098 mortgage interest statement. Students with gig income may also get a 1099-K, and a state refund or unemployment benefits arrive on the 1099-G.