If I pay for school in december (for the next semester) what year do I claim the expenses on my taxes?

[litehiker]

Heres the deal, my son started school last fall.  I received a 1099 t for the fall semester.  I paid his tuition etc for the spring semester in Jan.  Do I claim the spring semester on this years taxes, or next years?  (the 1099t only covers fall)  Thanks for the help!

[MichaelMc]

The general rule is that you can deduct (or use as the basis for a credit) on your income tax return those qualified educational expenses that you actually paid in that tax year, for attendance at an eligible educational institution during that tax year.

However, there is an exception (to allow for the way colleges actually register students for classes and issue bills) that you can deduct amounts paid in a tax year, for an academic period beginning in the first three months of the next tax year.

In your case, you can deduct the amounts paid in 2016 for you student's Fall semester. You cannot claim on your 2016 tax return the amounts paid in January 2017 for the Spring semester; those will be included on your 2017 tax return.

If you had paid for the Spring semester in December 2016, you could have claimed those amounts on your 2016 tax return.

[s_chun]

Is there an option to take the deduction in 2017 in this case? My case is that I paid for college on 12/28/15 for 2016 Spring semester and would like to take the credit in 2016 since it was not taken in 2015.

[gunther12344]

According to IRS Instructions for Form 8863 for 2017, "[q]ualified education expenses paid in 2017 for an academic period that begins in the first three months of 2018 can be used in figuring an education credit for 2017 only".  According to the same publication, "academic period" is defined as payments made in the calendar year for academic periods beginning in the calendar year or in the first 3 months of the following year.  Payment made in 2015 cannot be used in 2016.

[car_65]

My situation.  My 2017 1098-T shows billing for Winter 2018 and scholarships awarded for that same semester.  My payment was sent and dated via check in Dec 2017 but not shown paid by university until early Jan 2018.  How do I treat that payment?  For 2017 and match up with the 1098-T or will it be counted towards 2018 tuition payments and 2018 taxes next year?

[maglib]

just a note, if you had any student loans or 1099Q payments in 2017, they would count as eduction expenses paid in 2017. We are under same issue, our school started requiring payment in December an prior year it wasn't till January, doubling the education costs for 1 year.  We were saved as the stafford loan wasn't paid till 2017 and were able to claim that payment.

[lloydandjo]

THIS POST GIVES INACCURATE INFORMATION.  As stated in the comment above, "Qualified education expenses paid in 2017 for an academic period that begins in the first 3 months of 2018 can be used in
figuring the tuition and fees deduction for 2017 only."  There is no "exception" as noted above.

[maglib]

simplistic approach is the 1098-T is purely informational. You report when you actually pay the expense and you can NOT prepay for anything other than up to the first 3 months of the following year.

[Stepheni]

I am so confused. I think my brain has turned to mush.

I paid for my courses December of 2019. I have not received any tax documents from the school.

My classes started January 21,2020.

Do I claim my payment on 2019 taxes?

It asks if I was a full time student in 2019 and I was not as all of my classes started in this week.

[melanieft1]

Hi Stephani,

Were you able to figure this question out? I am currently in the same boat. My classes just began in 2021 but I paid for courses and supplies in December 2020.

[KrisD15]

You report the expenses you paid in the tax year that you paid AND the costs must be for classes you took that tax year and/or the first three months of the following year. 

Again, only what you paid top the school in 2020 should be on the 2020 1098-T. 

Whatever you paid in 2020 are expenses you can claim if those expenses were for classes you took in 2020 AND/OR the first three months of 2021. 

So, if your classes start January, February or March 2021, if you paid in 2020, you claim those expenses on your 2020 tax return. If you paid or will pay for them in 2021, they will go on your 2021 tax year return next year. 

BUT- if you paid late in 2020 for classes you took in 2019, the expenses don't count. You can't pay late the following year and you can't pre-pay further than the first three months of the following year either. 

IRS Pub 970

@melanieft1

[melanieft1]

Thanks Kris! and as far as answering the "current student" question? Do I just enter "no" since I just began my program last week instead of 2020?

@KrisD15 

[KrisD15]

ANSWER YES.

If you paid for classes in 2020 that started in 2021 (and I assume you did or you wouldn't be asking this) answer Yes, that you were a student in 2020.

Additionally, the 1098-T might report that you were less than half-time if you didn't attend in 2020, but that is not true for taxes. 

According to the IRS:

“For 2020, treat an academic period beginning in the first 3 months of 2021 as if it began in 2020 if qualified education expenses for the student were paid in 2020 for that academic period.”

So Yes, you were a student in 2020 and yes "at least half time" 

IRS Pub 970

[Zane3]

Here is the situation.

We do qualify for the AOC Credit. However, the expenses that we paid for in December of 2020 need to be be claimed on our 2020 taxes.

Here is the issue.

We are required to have a federal i.d number even though which is provided on our 1098-T form. We have not been issued a 1098-T form and in order to receive this credit you must provide the federal i.d number. This number is almost impossible to find so any help would be appreciated.

[KrisD15]

If you paid an eligible education institution, they should provide to you their EIN number. 

Call the school's administration office or student aid office to get that number. It might also be listed on their website.

The student should have an online student account. Check that online account to make sure the payment was posted in 2020. That online account might also hold the 2020 1098-T for the student. 

IRS Pub 970