EMU: Student Business Services, Parents Tax Information

Tax Information

1098T

The 1098T is mailed out each year to students in January . The document may also be printed from a student's my.emich account. To print a 1098T, log into my.emich and click on the "Student" tab. At the main menu, select "Student Services and Financial Aid" and then "Student Records." Next, click on "Select Tax Year," select the desired year, and click "Submit." Select "Tax Notification" and view the 1098T.

The 1098T is shown below. Be aware that EMU processes the 1098T based on the calendar year (January 2007 - December 2007). For tax-related questions, please contact your tax advisor.

1098TT

Box 1 - Payments Received for Qualified Tuition and Related Expenses: The government requires that an institution reports either payments received or amounts billed for qualified tuition and related expenses. Once an institution has selected one of the options, it is unable to change the method between calendar years. For this reason, Box 1 will be blank.

Box 2 - Amounts Billed for Qualified Tuition and Related Expenses: Shows the total amounts billed for qualified tuition and related expenses during the calendar year.

Box 4 - Adjustments made for a Prior Year: Shows any adjustment made for the previous calendar year.

Box 5 - Scholarships or Grants: The sum of the scholarships and grants administered and processed for the calendar year.

Box 6 - Adjustments to Scholarships or Grants for a Prior Year: Shows any adjustment made for the previous calendar year.

Box 7 - Checked if the Amounts in Box 1 or 2 include Amounts for an Academic Period Beginning January - March 2008: This box will be check if the student is enrolled in courses beginning in January through March of the next calendar year.

Box 8 - Checked if at least Half-Time Student: This box will be checked if the student is an undergraduate and enrolled at least half-time in the fall and winter semesters.

Box 9 - Checked if a Graduate Student: This box will be checked if the student is a graduate student (enrolled in a program leading to a graduate degree or graduate-level certificate).

Box 10 - Ins. Contract Reimbursements/Refunds: Shows the total amount of reimbursements/refunds of qualified tuition and related expenses made by an insurer.

Note: All boxes do not need to be populated - box 1 will be blank. Only the information on the front of the 1098T is reported to the government; the information on the back is not reported and is for the student's information only. The dates listed on the back of the 1098T reflect the date the semester begins.

Hope Scholarship Tax Credit

You may be able to claim tax credit for semesters beginning after 12/31/97. Payments made after 12/31/97 may be eligible for the credit.

The credit applies to the first two years of postsecondary education (for students who are enrolled at least half-time for at least one semester during the year). Half-time is six hours in the fall and winter semesters and three hours for the spring and summer semesters.

The credit can equal 100% of the first $1,000 and 50% of the second $1,000 of qualified costs, but cannot exceed the taxpayers total tax liability. Qualified costs include tuition and fees required for enrollment or attendance at an eligible educational institution. Qualified costs do not include books, room and board, student activities, athletics (unless the course is part of the student's degree program), insurance, equipment, transportation, or other similar personal, living, or family expenses. Qualified costs are to be reduced by certain financial aid awards including Pell, SEOG, institutional waivers, institutional scholarships, and possibly private scholarships.

The proceeds of student and parents loans flowing through the student's account are considered payments by the taxpayer. Only the student or the taxpayer (who claims the student as an exemption) can claim the credit. Married taxpayers must file jointly to be eligible for the credit.

The amount a taxpayer may claim as Hope Scholarship Credit is gradually reduced for taxpayers with modified adjusted gross incomes between $40,000 and $50,000 (between $80,000 and $100,000 for married taxpayers filing jointly). Taxpayers with modified adjusted gross income over $50,000 ($100,000 for married taxpayers filing jointly) may not claim a Hope Scholarship Credit. If the student is claiming the Lifetime Learning Credit, none of the student's expenses for that year can be applied toward the Hope Scholarship Credit.

Lifetime Learning Tax Credit

You may be able to claim a tax credit for semesters beginning after 06/30/98. Payments made after 06/30/98 may be eligible for this credit.

There is no restriction on the amount of postsecondary education that needs to be completed.

Through 2002, the credit is equal to 20% of the taxpayer's first $5,000 of out-of-pocket qualified tuition and related expenses for all students in the family. After 2002, the credit is equal to 20% of the taxpayer's first $10,000 of out-of-pocket qualified tuition and related expenses. This credit does not apply to each individual student; it applies for the family as a whole.

The amount a taxpayer may claim as a Lifetime Learning Credit is gradually reduced for taxpayers with modified adjusted gross income between $40,000 and $50,000 (between $80,000 and $100,000 for married taxpayers filing jointly). Taxpayers with modified adjusted gross income over $50,000 ($100,000 for married taxpayers filing jointly) may not claim a Lifetime Learning Credit. If the taxpayer is claiming a Hope Scholarship Credit for a particular student, none of that student's expenses for that year may be applied toward the Lifetime Learning Credit.

Student Loan Interest Deduction

You may be able to deduct interest you pay on qualified student loans. This deduction is an adjustment to income, so itemization on Schedule A is not necessary. The maximum deduction is $1,000 in 1998, $1,500 in 1999, $2,000 in 2000, and $2,500 in 2001 and thereafter. Principal repayment is not deductible.

The deduction may be limited depending on the amount of your modified adjusted gross income. This limit applies if your modified adjusted gross income is more than $40,000 ($60,000 in the case of joint return). If your modified adjusted gross income is more than $55,000 ($75,000 in the case of joint return), you cannot claim a deduction.

You will receive a 1098E form (Student Loan Interest Statement) to providing financial information related to this deduction. The form will be mailed each year in January.