The 2015 Protecting Americans from Tax Hikes Act (Act) required that colleges and universities (colleges) report the actual amount paid by students (or their parents) for qualified tuition expenses. What the colleges have been reporting is the amount billed for qualified tuition expenses. Amounts paid are shown in box 1 of Form 1098-T; amounts billed are shown in box 2.
Due to the above practice by colleges and IRS due diligence requirements imposed by the IRS on those preparing tax returns claiming the American Opportunity Tax Credit, tax preparers needed to request that taxpayers provide them with cancelled checks, bursar statements showing the amounts paid, or other forms of proof of payment to properly compute the educational credits. Thus the current practice by colleges placed a burden upon those claiming tuition credits and upon tax preparers.
It has been reported that the National Association of College and University Business Officers (NACUBO) have been told by IRS officials that the agency will not grant any additional time to the educational institutions to comply with the Act and that the qualified educational expenses paid must be shown on Form 1098-T effective for the calendar year beginning January 1, 2018. Thus for those claiming tuition credits in their 2017 tax returns, the colleges can still report the amounts billed.
The NACUBO says it will be looking for guidance from the IRS. Is this a ploy to further delay?
If you would like to discuss your business or personal tax planning, tax preparation and other financial concerns with an experienced tax professional, we invite you to call 610-594-2601 today to make an appointment at our Exton PA CPA office to discuss your situation. You can also schedule a consultation at Click Here.
