Tax Benefits for Education
Several tax benefits are available to help families meet the cost of postsecondary education. Two of those benefits are tax credits known as the Lifetime Learning Credit or the American Opportunity Credit (formerly named the Hope Lifetime Learning Credit). These tax credits directly reduce the amount of federal income tax owed. Seton Hall University has mailed the required Internal Revenue Service Form 1098-T (Tuition Payments Statement) to every student enrolled during the previous tax year to verify a student's enrollment for at least half time and/or as a graduate.
Seton Hall University cannot provide you with tax advice or assistance in determining whether you are eligible to claim a tax credit or how to claim a tax credit. To determine whether you, or the person who may claim you as a dependent, are eligible to claim either tax credit, please contact a tax professional or refer to IRS Publication 970 (Tax Benefits for Higher Education). If you need more information, please contact the IRS at 800-892-1040 or visit their website at www.irs.gov/taxtopics
Click here to view an example of the 1098T IRS Form »
Frequently Asked Questions about the Educational Tax Incentives:
What is Form 1098-T (Tuition Payments Statement)?
Form 1098-T are sent in January to students at Seton Hall University for whom any financial activity has occurred during the last calendar year.
Who prepared Form 1098-T?
Seton Hall University prepared the information on form 1098-T based on information provided by Enrollment Services.
Why did I receive Form 1098-T?
Form 1098-T has been provided to assist in determining if you, or the individual, who may claim you as a dependent, are eligible to claim an income tax credit on the previous year income tax return. You have received a 1098-T form if you have had any financial or registration activity at Seton Hall University.
What is the American Opportunity Credit?
You may be able to claim an American Opportunity Credit of up to $2,500 for qualified tuition and other educational expenses. The credit is available for the first 4 years of postsecondary education and 40% of the credit (up to $1,000) is refundable for many taxpayers. Students must be enrolled at least half-time during at least one academic period that begins during a tax year.
If I receive Form 1098-T, does it mean I qualify for the American Opportunity Credit or Lifetime Learning Tax Credits?
No, the University is required to provide Form 1098-T to individuals for who qualified tuition and fees were received during the calendar year.
Is it possible to qualify for both the American Opportunity Credit and the Lifetime Learning Credits, and if so, may I choose which one I would like to claim?
Yes, a student may qualify for both the American Opportunity Credit and the Lifetime Learning Credits at the same time. However, the qualifying expenses are the basis for claiming the American Opportunity Credit or Lifetime Learning Credit, but not both. In general, students who qualify for both the American Opportunity Credit and the Lifetime Learning Credit may find the American Opportunity Credit to be more beneficial.
How do I determine which expenses will qualify for the American Opportunity Credit and Lifetime Learning Credits?
Each individual must determine which, if any, of the expenses paid may be used in the calculation of the education tax credits. Generally the only qualified expenses are tuition and fees for enrollment or attendance less the net of scholarships, grants, and VA benefits. Please note that any amounts paid for room and board, insurance, medical fees, transportation, and similar living expenses are not considered eligible. If you have additional questions regarding these qualifications please contact your tax preparer.
