From: Denis Riker (driker@barnard.edu)
Date: Thu Feb 08 2001 - 08:36:26 EST
I recently posted the following question to the list:
"If your school is providing supplemental financial info with the 1098T,
what are you including in 'qualified charges'? Some folks understand
'qualified charges' to be tuition & other required academic fees, but
others say it's the lower of those charges OR the amount actually paid."
I received a number of requests to post responses I received. Below are
responses that were not posted to the list. Thank you all for your input.
>We do list all qualified expenses regardless of how paid on our
>supplemental form We then list all of non-taxable and potentially taxable
>gift aid that might offset those amounts. We leave it to the
>student/taxpayer to determine his or her "out-of-pocket" expenses. We
>report no aggregations on the face of the 1098-T.
>
>
>We've been struggling, as it seems you are, with how we might implement
>the proposed regs given the significant disparities in reporting abilities
>among reporting institutions.
>we have been providing figures in boxes 1 and 2 since the first year
>of the program. We have always used 'qualified charges' paid in the tax
>year - by any method, cash, aid, loans. That can include payments made in
>tax year 2000 for terms beginning within the first 3 months of the next tax
>year
>
>
>Our logic: why would we include unpaid charges? The idea behind the TRA of
>97 is to allow a credit for out-of-pocket expense. So, box 1 has charges
>paid and box 2 has the 'excludable' payments - Pell, etc. In theory, a tax
>payer would reduce box 1 by box 2 to see if they have an out of pocket
>expense that they can use for the credit. (Not that I'm giving tax advice,
>mind you)
> During the COHEAO teleseminar on December 5, '00, it was stated that
>qualified tuition and related expenses were those "required for enrollment",
>books, supplies, and equipment-if paid to the institution only-. Insurance
>or medical costs, health fees, etc., are not qualified fees. It was further
>stated that it is up to the taxpayer to determine which dollars paid
>qualified tuition and fees. As far as I know, there are no regulations
>stating specifically what dollars are allocated to what charges. Logically,
>it would be to the taxpayer's advantage to say their grant/scholarship
>dollars went towards non-qualifying charges such as room & board, while
>their dollars went towards qualifying charges.
> We send a statement of charges/credits to students, along with a
> letter,
>and a questions and answer sheet with the most commonly asked questions.
>We actually give them the three numbers:
>Tuition and required fees,
>Gift aid,
>and payment information attached to a 1098T with
>no totals in the boxes, this will get tougher soon if we
>are required to put totals in the boxes on the form.
>We include charges that would be required by ALL students, for
>example: tuition, lab fees, tuition drop costs, add and drop charges,
>correspondence course fees, non-resident fees, overload charges, etc.
>Hope this helps, but believe me, we don't feel we fully understand the
>requirements either.
>we provide an insert with their 1098T which provides general information
>on what qualified expenses are. Qualified Expenses are defined as tuition
>and fees a student is required to pay "out of pocket" in order to be
>enrolled at or attend the University. Amounts paid for any course or
>other education involving sports, games, or hobbies are not eligible for
>the credit unless the course or other education is part of the student's
>degree program. Charges and fees associated with room, board, student
>activities, athletics, insurance, books, equipment, transportation, and
>similar personal, living, or family expenses are not qualified. "Out of
>Pocket Expenses" are defined as qualified expenses paid with student's
>earnings, a loan, gift, inheritace, or personal savings are included;
>expenses paid with a Pell Grant, other tax-free scholarships, tax-free
>distribution from Education IRA, or tax-free exmployer provided
>educational assistance are not counted.
>
>
>So basically, it is eligible tuition and required fees to be enrolled at
>the university LESS any scholarships, grants, employer paid assistance.
>we provide our students with a summary statement along with our 1098-T
>Forms. The Summary includes yearly totals (Qualified Tuition,
>Refunds/Reimbursements and Gift Aid), and a breakdown of those totals by
>semester. Rationale: Calls are minimal because students & families are
>more familiar with their tuition paid each semester.
>
>
>Our 'Total Tuition Paid' column includes all fees allowed as Qualified
>Charges. This includes all fees REQUIRED to attend, including Registration
>Fees, Out-of-state Tuition, Special Class Fees, Financial Aid Trust Fee,
>Recreation Bond Fee (NOT an activities fee), and Arizona Student
>Association Fee. (Some book/equipment fees may also be included IF the
>school Requires the student to purchase them there and nowhere else.)
>We exclude Student Health Insurance and Late Fees which are listed in a
>separate Non-Qualified Fees column, so that the student knows they were
>not included.
>We do include a disclaimer that the student should consult with their tax
>advisor regarding specific courses which may not qualify - i.e. courses
>which do not apply toward a degree (for Hope or Lifetime Learning) OR
>which do not apply toward job skills (for Lifetime Learning Credits).
>
>
>I studied the above fees extensively in the original TRA97 legislation as
>well as subsequent amendments and this is accurate to the best of my
>knowledge. The definition has not changed. Some people are confused
>because other education-related legislation defines "Qualified Tuition" in
>a completely different manner. There are at least three different IRS
>definitions of 'Qualified Tuition' which should not be confused.
************************************************************************************************
Denis Riker, Bursar
Barnard College, Columbia University
3009 Broadway
NY, NY 10027-6598
Voice: (212) 854-2026
Fax: (212) 854-3888
Web: www.barnard.edu/bursar
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