From: Anne Gross (AGross@nacubo.org)
Date: Fri Jun 30 2000 - 15:58:33 EDT
I agree that the devil will be in the details in determining the appropriate
dollar amounts to put in each of the three aggregated amounts on the 1098-T.
However, I don't think it is quite as bad in relation to grants as you
believe. Institutions are required to report total payments for qualified
expenses, but not to make any distinction in the source of those payments.
That is why the separate reporting of grants processed through the
institution was added to the law -- the original statute envisioned
institutions providing one "net" number to students. Institutions do not
have to make any determination as to how the grants were used, that is up to
the taxpayer. Institutions just report total amount of grants and do not
have to allocate specific payments to specific expenses or, heaven forbid,
get between parents and how they want to file their taxes.
This still gets sticky when charges have been billed and partial payment
made before the end of the tax year, because then it is not clear how the
institution decides whether the payment that has been received was for
qualified expenses or room and board. The proposed regs address this by
saying that:
"payments received with respect to an individual during the calendar year
from any source (except for any scholarship or grant that, by its terms,
must be applied to expenses other than qualified tuition and related
expenses, such as room and board) will be treated a payments of qualified
tuition and related expenses up to the total amount billed by the
institution for such expenses."
Does this clear the issue up, or still leave it fuzzy? It seems to imply
that payments should count first toward qualified expenses.
I'd love to see further discussion of these issues on or off the list, as I
think this issue will be the big one with the proposed regulations. Anne
Anne C. Gross
Director, Policy Research and Analysis
NACUBO
202-861-2544 agross@nacubo.org
http://www.nacubo.org
-----Original Message-----
From: Eileen M. Walker [mailto:emwalker@cc.owu.edu]
Sent: Friday, June 30, 2000 2:52 PM
To: AGross@nacubo.org; kyllikki.kusma@ey.com; bursar-l@virginia.edu
Subject: Re: Education Tax Credit Reporting Rules
Unfortunately, I still see the same bad news in these proposed regulations.
The regulations require the institution to determine how much of any
payments, refunds and grants relate to "qualified tuition and related
expenses." Since we also include room and board and miscellaneous fees on
our tuition billing, these regulations will require us to allocate these
payments and grants in a way which might be contrary to the taxpayer's
wishes. i.e. if we indicate on the 1098-T that a payment was for tuition
expense and a grant was for room and board, this leaves the grant taxable
and the tuition payment eligible for the Hope Scholarhip credit. On the
other hand, if we say that a payment was for room and board and a grant for
tuition, this results in the grant being exempt from tax, but the room and
board payment not being eligible for the Hope Scholarship credit. I think
this point needs to be made loud and clear in the comments to the IRS. Is
this really the institution's responsibility to allocate payments on
student accounts?
Thanks for keeping us abreast of these developments.
At 12:15 PM 6/23/00 -0400, you wrote:
>
>Date: Fri Jun 23 12:15:24 2000
>From: AGross@nacubo.org
>To: IN%"bursar-l@virginia.edu"
>Subject: Education Tax Credit Reporting Rules
>
>In case you haven't heard, I wanted to let everyone know that the IRS
issued
>proposed rules for information reporting for the Hope and Lifetime Learning
>tax credits, and student loan interest, last week. The notice was published
>in the Federal Register on June 16. A link is provided on our Web site at:
>
>http://www.nacubo.org/Federal%20Register/00/061600.html
>
>The news is pretty good: The IRS has not included requirements for
>collecting or reporting information on taxpayers who will claim students as
>dependents. The exemption for reporting on noncredit and nonresident alien
>students would be continued. The rules would be effective for reporting for
>tax year 2001 (with the current scaled-back requirements remaining in
effect
>for 2000).
>Institutions will be required to report financial data in the boxes on the
>1098-T, which will probably be the biggest challenge.
>
>NACUBO will issue a Special Action Report in the next few weeks and will
>work with other associations and institutions to draft comments by the
>September 14 deadline. As always, your input is valued. Anne
>
>Anne C. Gross
>Director, Policy Research and Analysis
>NACUBO
>202-861-2544 agross@nacubo.org
>http://www.nacubo.org
>
Eileen M. Walker
Controller
Ohio Wesleyan University
Delaware, Ohio 43015
emwalker@cc.owu.edu
Phone: (740)368-3363
Fax: (740)368-3009
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