Tax Topics

Hope Tax Credit Information
1098-T Forms Information
Education Tax Benefits
Lifetime Learning Tax Credit Information
Scholarship Tax Information
Non-Resident Alien Contacts

Other Links:

Internal Revenue Service
National Association of College and University Business Officers (NACUBO) (This web site provides an in-depth explanation of the Taxpayer Relief Act of 1997, with particular emphasis on the Hope and Lifetime Learning tax credits.)

Hope Tax Credit Update

Dear Parents and Students:

As you may know, the Taxpayer Relief Act (TRA) of 1997 was adopted by Congress and the President. Among its features, it provides for two tax credits that you may be eligible to claim on your income tax return.

Hope Tax Credit

This is a tax credit and NOT a scholarship. According to IRS guidance, the Hope tax credit:

Applies to students enrolled in the first two years of postsecondary education. Thus, it is not applicable to graduate or professional school students. Applies to students enrolled at least half time for at least one session during the calendar year. Is effective for payments made during the calendar year.

1098-T Forms

1098-T forms, released at the end of January, report qualifying charges made during 2012, not payments you made to U.Va. Qualifying charges include tuition, mandatory (comprehensive) fees, off-grounds fees, but not housing or dining charges. Tuition for non-credit classes is not a qualifying charge. For 2012, 1098-T forms will reflect charges for the Fall 2012 term (billed in July 2012) and the Spring 2013 term (billed in December 2012). For best viewing results, please ensure you have downloaded and installed Adobe Reader X. For detailed instructions how to receive your 1098-T form in electronic-only format, click here.

The University of Virginia will not produce a record of payments made during 2012. Please understand that our staff will be unable to reproduce your payment history for you. However, Current Account Activity in QuikPay@UVA will list your complete history of payments, including any check payments made in person or by mail. Please refer to QuikPay for this information.

If your tuition and fees were paid through the Virginia Pre-Paid Tuition Plan (VPEP), please contact them directly to obtain a record of payments made during 2012. They can be reached at 1-888-567-0540. If your payment was made through a pre-paid education program from a state other than Virginia, please contact that program directly to obtain a record of payments made to the University of Virginia.

As in all matters related to the tax implications of education expenses, our staff will be unable to advise parents and students. We strongly encourage you to speak with a qualified tax advisor to answer questions specific to you or your student. Information about education credits can be found here, and IRS publication 970 regarding tax benefits for education can be found here. In all cases, when claiming a tax credit or deduction, the taxpayer's financial records serve as the official supporting documentation for calculating the amount being claimed.

Several classes of students will not receive a 1098-T form. These are:

If you graduated in May 2012, your last charges were billed in December 2011, so you will not have a 1098-T form for 2012. There is no need to contact Student Financial Services, as we are unable to process a 1098-T for you. Please consult your tax advisor for advice on how to account for education-related expenses for 2012.
If scholarships are equal to or greater than the tuition charges, no 1098-T will be produced.
If you receive federal grants, and if your aid covers all your tuition and fees costs for the year, no 1098-T will be produced.
If academic credit was not obtained in the calendar year for which the 1098-T is generated, no 1098-T will be produced.
If your department paid your charges in full, no 1098-T will be produced.

How to read the information in the 1098-T form:

Box 2 - Amounts billed for qualified tuition and related expenses

Includes all eligible tuition and fee charges posted to the account during the tax year, regardless of the term, that fall within the calendar year 2012.

Box 4 – Adjustments made for a prior year

This box is used when tuition that was already reported in a prior year (for example, 2011) is reduced during the current tax year (2012) for a prior term. The amount in this box is always a reduction from a prior year’s Box 2 amount.

Box 5 – Scholarships or grants

Includes all scholarships disbursed to the account during the tax year (2012), regardless of the term.

Box 6 – Adjustments to scholarship or grants for a prior year.

This box is used when scholarships that were originally disbursed in the prior calendar year are reduced during the current tax year (2012) for a prior term.

Education Tax Benefits

February 1, 2013

RE: Reminder about Education Tax Benefits

Dear University Parents & Students:

As the deadline approaches for filing personal income tax returns, we would like to remind you of the Federal educational tax benefits for which you may be eligible. Taking full advantage of these tax benefits would help reduce your higher education expenses.

The following information is intended for educational purposes and should not be considered legal or tax advice. Please consult your professional tax advisor or attorney for more information and to determine your eligibility. The University cannot provide legal or tax advice to individuals.

To help students and their parents, the Internal Revenue Service offers the following ways to offset education costs:

-American Opportunity Credit
-Lifetime Learning Credit
-Tuition and Fees Deduction
-Student Loan Interest Deduction

For more information on the education benefits listed above, see Publication 970, Tax Benefits for Education, which can be obtained at http://www.irs.gov/pub/irs-pdf/p970.pdf or by calling the Internal Revenue Service (IRS) at 800-TAX-FORM (800-829-3676).

The University reported the total amount billed to you in box 2 of the 1098-T form. Please review your account activity in QuikPay@UVa to obtain a record of your payment information; you will need this payment information to calculate your tax credits. Parents, if your student has not set you up as an authorized payer in QuikPay@UVA, we recommend you request your student to do so at this time.

If you have any questions about your eligibility for these tax benefits, please contact the IRS or your professional tax advisor or attorney.

Sincerely,

Steve Kimata
Assistant Vice President for Finance

Cc Carol Stanley

Lifetime Learning Tax Credit Information

This is a tax credit and NOT a scholarship. According to IRS guidance, the Lifetime Learning tax credit:

Applies to students who are enrolled in one or more courses at an eligible educational institution. The course or courses must be either part of a postsecondary degree program or taken by the student to acquire or improve job skills. UVA is an eligible educational institution.

There are many other details surrounding the Hope and Lifetime Learing Tax Credits. We recommend that you contact your own tax professional to see if you qualify for these credits. Unfortunately, the University can not provide tax advice. You can also contact the IRS' Office of Public Liaison at 202-622-2970 or view Publication 970 on the IRS website for further information.

Office of Student Accounts
University of Virginia

Important Tax and Scholarship Information

MEMORANDUM

TO: Students Receiving Scholarships and Fellowships
FROM: Stephen A. Kimata
SUBJECT: Taxability of Scholarships and Fellowships

This memorandum informs you of the possible tax implications of awards you received during the previous calendar year. Please note that tuition remissions will continue to be nontaxable and will not be reported as income to you. The 1986 Tax Reform Act rewrote Section 117 of the Internal Revenue Service (IRS) tax code to limit the exclusion of scholarships or fellowships from income to the amount used for the payment of tuition and "course required fees, books, supplies and equipment" (summarized as "course-related expenses"). Room and board are not defined as "course-related expenses". You should retain receipts for all deductible items. This provision will apply to all recipients regardless of sources of those funds. Other funds paid as a part of a scholarship or fellowship, such as stipends or living allowances, are taxable income. A description of the amount of scholarships to be reported as taxable is included in the instructions for line seven of IRS Form 1040.

If you do not know the amount of your calendar year scholarships received or tuition and fees paid you can view your 1098T on SIS
. The 1098T WILL NOT include fellowship stipend amounts.

The IRS has exempted universities from the requirements to file Form 1099 (statement of miscellaneous income) on scholarships and fellowships. Thus, while these funds may be taxable, you will not be receiving any notification from the University. The University is also not in a position to provide students with tax advice. You may want to consult the IRS or tax counsel as appropriate in the preparation of your income tax returns.

Non-Resident Alien Contact

You may contact the following person if you need Non-Resident Alien information:

Timothy White- (434) 982-2735 - tjw5x@virginia.edu

Phone (434) 982-6000
Fax (434) 924-7636