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

 
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Level 15

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

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.

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3 Replies
Level 15

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

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.

View solution in original post

New Member

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

I have a 1098t from my daughters college with nothing in box 1 and an amount in box 2. What should I do?
Level 15

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

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.
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