The reporting requirement changed in 2016, but last year was the last year the IRS accepted a 1098-T without Box 1 reported. Box 1 reports what was paid to the school in the tax year. Box 2 reports what was billed by the school in the tax year. Box 5 reports what the school received as scholarships for the student it the tax year.
That's it. The credits have ALWAYS been based on what was paid in the tax year.
People were reporting Box 2 as what was paid for the tax year, which isn't always accurate. If the school billed in December, it would be in Box 2 WHAT WAS BILLED. Some people didn't pay until Jan of the next year but were claiming expenses in Box 2, which they didn't yet pay. THAT'S the reason the IRS wants to see Box 1 reported.
NOW, Box 1 reports WHAT WAS PAID. That is all the IRS cares about. If your box 5 is larger than box 1, your student has taxable income UNLESS a scholarship posted in 2018 for tuition that was billed "in another year".
If you paid in 2017, it will not be in Box 1 on your 2018 1098-T and it shouldn't be. You could have claimed it on your 2017 tax return.
Here is a link for the directions for form 1098-T
<a rel="nofollow" target="_blank" href="
https://www.irs.gov/pub/irs-pdf/i1098et_18.pdf">https://www.irs.gov/pub/irs-pdf/i1098et_18.pdf</a>
"Prepaid expenses. Qualified education expenses paid
in 2018 for an academic period that begins in the first 3
months of 2019 can be used in figuring an education
credit for 2018 only. See Academic period, earlier. For example,
if you pay $2,000 in December 2018 for qualified
tuition for the 2019 winter quarter that begins in January
2019, you can use that $2,000 in figuring an education
credit for 2018 only (if you meet all the other requirements).
You can't use any amount you paid in 2017 or
2019 to figure the qualified education expenses
you use to figure your 2018 education credit(s).
In the following examples, assume that each student"
