Form 1098-T Reporting Requirements for Educational Institutions

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Every year, eligible educational institutions are required to file Form 1098-T, the Tuition Statement, with the IRS and furnish a copy to their enrolled students. While it may seem like just another compliance checkbox, this form plays a meaningful role in the tax filing process. It provides students and their families with the information they need to claim valuable education tax credits, such as the American Opportunity Credit or the Lifetime Learning Credit.

For institutions, filing accurately and on time isn’t optional; it’s a legal obligation. Understanding what’s required, who it applies to, and how to stay compliant can save institutions from costly penalties and ensure their students aren’t left scrambling during tax season.

Who must file Form 1098-T?

Any eligible educational institution, including colleges, universities, vocational schools, and other accredited postsecondary institutions that participate in the U.S. Department of Education’s student aid programs, is required to file Form 1098-T. This covers most public, nonprofit, and private postsecondary institutions.

The filing obligation can also extend beyond the institution itself:

• Third-party collectors — If a third party collects or receives payments of qualified tuition on behalf of the institution, the filing responsibility shifts to them. 
• Insurers — If an insurance company reimburses or refunds qualified tuition and related expenses directly to a student, they are also required to file Form 1098-T.

What must be reported?

Institutions must report information for each student they enroll and for whom a reportable transaction takes place during the calendar year. At a high level, the key reporting categories include:

• Payments received — The total amount of payments received for qualified tuition and related expenses from all sources during the calendar year. This includes tuition, fees, and course materials that are required for enrollment or attendance.
• Scholarships and grants — The total amount of scholarships or grants administered and processed by the institution during the year. This includes payments from governmental and private entities such as the Department of Veterans Affairs, the Department of Defense, civic organizations, and nonprofits.
• Enrollment status — Whether the student was enrolled at least half-time during any academic period, and whether the student was a graduate student.

It’s equally important to know what falls outside the scope of reporting. The following are not considered qualified tuition and related expenses and should not be reported:

• Room and board, insurance, medical expenses, and transportation
• Courses involving sports, games, or hobbies, unless they are part of the student’s degree program or taken to improve job skills

Key deadlines & filing requirements

Staying on top of deadlines is critical for institutions to remain compliant. Here’s what you need to know:

• January 31 — The deadline to furnish Form 1098-T to students. This gives students enough time to use the information when filing their tax returns.
• February 28 — The deadline to file paper returns with the IRS.
• March 31 — The deadline to file electronically with the IRS.

When it comes to the filing method, institutions don’t always have a choice. Thanks to the Taxpayer First Act of 2019, e-filing is mandatory for institutions that file 10 or more information returns in the aggregate. For most institutions, this means electronic filing is the default requirement rather than an option.

Institutions can file electronically through the IRS’s Information Reporting Intake System (IRIS), an online portal developed specifically for e-filing information returns.

Common mistakes educational institutions make

Even well-intentioned institutions can run into compliance issues with Form 1098-T. Being aware of the most common mistakes can go a long way in avoiding them:

• Incorrect or missing TINs — Institutions must collect each student’s TIN using Form W-9 or an equivalent. Filing with an incorrect or missing TIN is one of the most frequent errors.
  
• Filing for exempt students — Not every student needs to file a Form 1098-T. Filing for nonresident alien students (unless requested), students fully covered by scholarships, or students in non-credit courses can create unnecessary errors.
  
• Misreporting scholarships vs. payments — Scholarships and grants must be reported separately from payments received. Netting one against the other misrepresents the student’s financial picture.
  
• Missing the e-file threshold — Institutions filing 10 or more information returns that still submit paper forms are non-compliant. Track your total filing volume across all return types.

Penalties for non-compliance

Failing to meet Form 1098-T obligations can result in significant IRS penalties. As of 2026, the penalty amount generally depends on how late the filing is:

• $60 per return — if filed within 30 days of the due date
• $130 per return — if filed more than 30 days late but before August 1
• $340 per return — if filed after August 1 or not filed at all

In cases of intentional disregard, the penalties are significantly steeper, with a minimum of $680 per return and no annual cap. Staying organized and filing on time is always the more cost-effective path.

The bottom line 

Form 1098-T compliance isn’t just a paperwork exercise; it directly impacts a student’s ability to claim education tax credits and reflects the institution’s commitment to accurate reporting. From understanding who must file and what qualifies as a reportable expense, to meeting deadlines and avoiding common pitfalls, every step in the process matters. Managing all of this manually can quickly become overwhelming, especially when handling large volumes of student data. That’s where solutions like TaxBandits can make a difference, helping institutions streamline e-filing, validate information, and stay aligned with IRS requirements without added complexity.