Can new 2018 Form 1098T Box 1 and 2 be empty?

[chrissyluckie]

I understand IRS rules changed as of 2018 to force schools to report expenses that qualify for AOTC as "Payments Received" in Box 1, versus "Amounts Billed" in Box 2, which no longer exists.

So why do Boxes 1 and 2 both appear totally blank on my brand new 2018 Form 1098T?

Although the sum listed in Box 5 "Scholarships/Grants" is more than total payments for tuition received directly by the school from Pell awards, I paid my room, board and other attendance costs with interest bearing federal loans.

Can I still qualify for AOTC this tax year (2018)? How to list other eligible expenses when the link below Box 1 on your online 1098T Form doesn't appear to function?

[Critter · Accepted solution]

First it is possible the school got it wrong ... ask them for a corrected copy.

Next, it is possible that you paid for the 2018 tax year in 2017 so nothing was paid in 2018 so a zero in box 1 would be correct. 

And if the "free" money in box 5 paid all of your qualifying expenses then there would be nothing for the credit to be based on.  The other living costs you paid for with loans do not qualify for the credits. 

However, there is a loophole if you wish to use it ... IF  you want to, up to $10K of the box 5 amount could be considered taxable income & be reported as such on the form 1040 line 1 then that portion will qualify for the credit since it was paid with taxable income.

[chrissyluckie]

Thanks so much for such a fast and detailed reply. Do I understand you correctly that I  may qualify to claim $3043 itemized below my 1098T Form that applied to 3 academic terms during CY 2018, provided I list the $7488 in Pell Grant funds as taxable income on Form 1040A, Line 1?

If so, what type or category of income should be listed for Pell funds? Would I need to fill out any extra Schedules to fit into this loophole?

Thanks again in advance!

[Critter · Accepted solution]

The election is made in the Education expenses section of the program and will show on line 1 with the letters SCH in the margin.