RE: 1098-T question

For what it's worth, I agree completely with Anne.

>>> "Gross, Anne" <AGross@nacubo.org> 3/21/2005 2:05 PM >>>
A few key points to remember about the reporting of scholarships on the
1098T:

1. The inst reports scholarships, regardless of whether the funds were
used for tuition or room and board or something else. You do not need to
modify your reporting based on the use of funds received.

2. It is up to the student/taxpayer to determine whether scholarships
were used for "qualified" or nonqualified expenses, but you may want to
remind the parent that the student must treat any grant that is not used
for tuition and fees as taxable income. Refer them to page 11 of IRS Pub
970, which can be found at http://www.irs.gov/pub/irs-pdf/p970.pdf.
They don't need proof of which money paid which charges, but any
tax-free grant must be subtracted from qualified expenses first.

3. The IRS understands that there are timing issues between information
reported on charges and scholarships, especially for spring semesters.
The taxpayers are responsible for sorting it out. They do not need to
have a 1098T that matches what they claim exactly.

That said, I don't see that you need to, or can, make changes to the
1098T or what those changes would be. The scholarship gets reported as a
scholarship in any event. Same with charges. Maybe I am missing
something...Anne

Anne C. Gross
Vice President, Regulatory Affairs
NACUBO
202-861-2544 anne.gross@nacubo.org
202-449-1229 (fax)

-----Original Message-----
From: bursar-l-bounces@list.mail.Virginia.EDU
[mailto:bursar-l-bounces@list.mail.Virginia.EDU] On Behalf Of Melissa
Rauch
Sent: Monday, March 21, 2005 10:04 AM
To: bursar-l@list.mail.Virginia.EDU
Subject: 1098-T question

Good Monday Morning!

We started the day with a sophmore parent questioning the amounts on the
1098-T. I am enlisting your assistance in anyway possible (ie even if
you are not a Michigan school or a Datatel )

Background:

A. We are a Michigan school, therefore, students may qualify for MEAP
(state) monies for the first two years. This scholarship is earned by
testing that is done throughout elementary and high school years.
The MEAP scholarship is applied toward tuition or can be refunded for
purchasing a computer or books (there are other qualifications, but we
are not directly involved in that). If a student requests MEAP money to
be refunded, we have to refund it.

B. We have the semester format. Our Spring semester (beginning in
early January) is billed in December. This causes it to be included in
the prior year 1098-T information. A calendar year will include tuition
for any or all of the following: summer, fall and the next years spring.

(unless they register for spring after the 1st of the year - very late)

C. Our financial aid is transmitted (officially applied to the student
account vs. showing as pending) at the end of the semester. The 1098-T
information will include scholarships for spring, summer, and fall. Not
the following spring for which tuition is included.

This causes the freshman and senior years to look a little strange,
although they are accurate.

Now to the question of the morning. Because the parent did not
understand the MEAP (ability to w/draw and not apply to tuition), she is
asking us to make changes so they can get the Hope Tax credit for the
2nd and last year. She wants us to make it appear that they paid the
$1250 (1/2 for 04/SP and 1/2 for 04/FA) for tuition instead of the MEAP
scholarship paying towards tuition.

She is suggesting we give the daughter a bookstore voucher for $1250,
then she can show documentation that she paid (she did pay us, it was
just applied towards room and board because the scholarships
'officially' are applied to tuition first).

1. Do you know if we can do that? (give the voucher for a prior
semester in a prior fiscal year?)

2. If we do it, how do I make a change to the IRS reporting. I have
never made ammendments to the amounts after submitted. I am also told
by my programmer, that he does not know a way to change an individual
amount. Wouldn't this cause audit issues?

3. We use Datatel Colleague. If I can change an individual, does
anyone know how in Colleague? How do I report the change to the IRS?

PLEASE help!

I appreciate any advice from Datatel schools, Michigan schools and all
others.

Sorry for the length. Thanks in advance.

Melissa Rauch
Aquinas College
Student Accounts
voice 616.632.2918; fax 616.732.4482
www.aquinas.edu
Received on Mon Mar 21 15:09:39 2005