There are two school reporting requirements that involve FSA that are not Department of Education requirements. Both reporting requirements are Treasury Department/Internal Revenue Service (IRS) requirements.
There are two variations of IRS form 1098 that your school’s business office needs to understand in respect to the reporting requirements of the Treasury Department/Internal Revenue Service –
- IRS Form 1098-E, and
- IRS Form 1098-T.
IRS Form 1098-E
Student loan interest payments are reported on the IRS Form 1098-E, Student Loan Interest Statement. If a borrower made federal student loan payments in 2014, the borrower may be eligible to deduct a portion of the interest paid on the borrower’s 2014 federal tax return. Student loan interest payments are reported to both the Internal Revenue Service (IRS) and the borrower on IRS Form 1098-E. As required by the IRS, federal loan servicers report payments on IRS Form 1098-E if the interest received from the borrower in the tax year was $600 or more. If a borrower paid less than $600 in interest to a federal loan servicer during the tax year, the borrower may contact his or her servicer for the exact amount of interest paid during the year.
Your school must provide IRS Form 1098-E only to individuals who paid student loan interest of $600 or more on loans held by your school during a calendar year. Examples would include tuition loans, emergency loans, and Federal Perkins loans where your school directly receives payment from the student.
IRS Form 1098-T
Your school must provide Form 1098-T, Tuition Statement, for each student enrolled for credit and for each student whom a reportable transaction is made. You may choose to report payments received, or amounts billed, for qualified tuition and related expenses.
These are the exceptions to this requirement – you do not have to file Form 1098-T or furnish a statement for:
- Courses for which no academic credit is offered, even if the student is otherwise enrolled in a degree program;
- Nonresident alien students, unless requested by the student;
- Students whose qualified tuition and related expenses are entirely waived or paid entirely with scholarships; and
- Students for whom you do not maintain a separate financial account and whose qualified tuition and related expenses are covered by a formal billing arrangement between an institution and the student’s employer or a governmental entity, such as the Department of Veterans Affairs or the Department of Defense
If you are required to file Form 1098-T, you must furnish a statement or acceptable substitute, on paper or electronically, to the student. The student, or the person who can claim the student as a dependent, may be able to claim an education credit on Form 1040 or 1040A, only for the qualified tuition and related expenses that were actually paid in 2014. For more information on education credits, see Publication 970 at http://www.irs.gov/pub/irs-pdf/p970.pdf
You will find a copy of the 1098-T form at http://www.irs.gov/pub/irs-pdf/f1098t_14.pdf, however this form is provided for informational purposes only. Copy A appears in red, similar to the official IRS form. Do not file copy A downloaded from this website. The official printed version of this IRS form is scannable, but the online version of it, printed from this website, is not. A penalty may be imposed for filing forms that can’t be scanned.
To order official IRS forms, call 1-800-TAX-FORM (1-800-829-3676) or Order Information
Returns and Employer Returns Online, and the scannable forms will be mailed to you.
Instructions for 1098-E and 1098-T Forms can be found at http://www.irs.gov/pub/irs-pdf/i1098et_14.pdf
- Furnish Copy B of this form to the student by February 2, 2015.
- File Copy A of this form with the IRS by March 2, 2015.
- If you file electronically, the due date is March 31, 2015.
If you are required to file 250 or more information returns, you must file electronically. To file electronically, you must have software that generates a file according to the specifications in Pub. 1220, Specifications for Electronic Filing of Forms. For information on furnishing Form 1098-T electronically, see the separate Specific Instructions for Form 1098-T. http://www.irs.gov/pub/irs-pdf/i1099gi.pdf
If you have questions about reporting on Form 1098-T, call the information reporting customer service site toll free at 1-866-455-7438 or 304-263-8700 (not toll free).