What is the difference between box 1 and 2 on the 1098t? Can I claim box 2 on ky qualifying expense

[Carl]

EDIT: 2/1/2019: Effective with the 2018 Form 1098-T box 2 is *NO* *LONGER* *USED*. If you have anything in box 2, then it's ***WRONG***

On the 1098-T, either box 1 *OR* box 2 will have an amount in it. There will never be an amount in both boxes. If there are, then contact the BUSAR because they made a mistake.

Box 1 is the amount of qualified education expense that the college has received and "actually applied" to your qualified expenses.

Box 2 is the mount of qualified education expenses the college has "billed" you for, but as of the issue date of that 1098-T, the billed amount has not been paid. Or if it has been paid, then it just hasn't been credited yet.

Generally, when you have an amount in box 2 the program will ask you if you 'actually paid" that amount. From my experience with this, I've never known anybody to say "no, I didn't pay it". They always select "YES, I paid it"  That's because qualified education expenses are claimed/deducted in the tax year they are paid. It flat out does not matter what year they pay *for*.

Remember, colleges work in academic years, and the IRS does not. So the reality is, it takes you five calendar years to get that four year college degree.

[spworcester]

I have a 1098t from my daughters college with nothing in box 1 and an amount in box 2. What should I do?

[Carl]

Contact the issuing college and have them issue you a "correct" 1098-T. Box 2 is just flat out not available beginning in 2018, and no longer used. If they want to argue the point, refer them to the IRS instructions for the 1098-T at <a rel="nofollow" target="_blank" href="https://www.irs.gov/pub/irs-pdf/i1098et.pdf">https://www.irs.gov/pub/irs-pdf/i1098et.pdf</a> on page 4, It quite clearly reads:
Box 2. Reserved
This box is reserved for future use.
If they are still hard-headed and want to agrue, refer them to page one of the instructions in the 2nd column where it reads:
Penalties. For Forms 1098-E and 1098-T, penalties may be
imposed for failure to file or failure to furnish correct forms.
However, under certain circumstances, the penalties may be
waived. See part O in the 2019 General Instructions for
Certain Information Returns for more information.