Form 1098-T: an example of international students’ special needs

Blank Form 1098-T

I am not a tax attorney or tax consultant. I’m merely an undergraduate student at the University of Pennsylvania, and the Co-Chair of the International Student Advisory Board.

IRS Form 1098-T, which educational institutions issue to students as a tuition statement for tax purposes, is used by many American families to claim educational credits or deductions on their federal tax returns.

Should international students have this form?

It’s complicated. In many situations, yes.

Universities often will choose not to issue this tuition statement to international students because those students can’t do anything with it. ← If I had to write this with footnotes, there would be a million asterisks next to that sentence; keep reading. We’ll return to this question below.

Are international students able to use this form for anything?

Most international students are ineligible to claim those educational credits/deductions because they are nonresident aliens (e.g. F-1 student). Hence, these individuals would not benefit from having the 1098-T.

Some, especially graduate students, may be eligible to claim credits/deductions because…

  1. they are resident aliens per the substantial presence test, particularly after the 5th year of being in the United States;
  2. they are nonresident aliens for immigration, but resident aliens for tax purposes as the spouse of an American citizen or resident alien; or
  3. they are nonresident aliens for both immigration and tax purposes, but eligible dependents of parents who are resident aliens/permanent residents/citizens; those parents are able to claim these credits in certain situations.

IRS Publication 970 explains who is eligible to claim the American Opportunity Credit. Of note: tax-free scholarships and grants affect whether, and how much, you can claim.

Figure 2-2 from IRS Publication 970, illustrating who is eligible to claim the American Opportunity Credit.
Figure 2-2 from IRS Publication 970, illustrating who is an eligible student for the American Opportunity Credit. Note: not all eligible students can claim. See Publication 970 for a flowchart of who is eligible to claim.

I am an international student in the above categories. Can I get a 1098-T from my school?

The IRS says that universities “do not have to file Form 1098-T or furnish a statement for… nonresident alien students, unless requested by the student“. Additionally, they are not required to provide it for “students whose qualified tuition and related expenses are entirely waived or paid entirely with scholarships”.

You must still meet all of the other requirements to get a 1098-T:

  1. Attend an eligible educational institution (college, university, vocational school, or other postsecondary educational institution in §481 of the Higher Education Act)
  2. Have paid qualified tuition and related expenses in that tax year
    • i.e. tuition, fees, course materials required to be enrolled
    • does not include room, board, insurance, medical expenses including student health fees, transportation, and personal/living/family expenses
  3. Receive credit for the completion of course work leading to a postsecondary degree, certificate, or other recognized postsecondary educational credential
    • i.e. most undergraduate bachelors programs and graduate masters and PhDs are fine
    • continuing education is often not included
  4. Be enrolled in any academic period of that tax year (consult IRS instructions for exceptions)
  5. Have provided your SSN or ITIN to the educational institution either through student records or an additional Form W-9S

What are some potential hurdles?

I was in a situation this year where my university did not issue me a 1098-T, and responded to my request with a form letter:

Does every Penn student receive a 1098-T?
Penn does not provide a 1098-T to non-resident aliens, or any student whose qualified charges are fully funded by grant, scholarship or tuition waivers, or any student who was enrolled in non-credit courses during the academic year.

They additionally stated,

“Though you might have received a 1098t form in the past, going forward as a Canadian citizen you will not receive one.”

As I’ve explained above in this post, this determination was a mistake. It conflates citizenship & immigration status with residency for tax purposes, and ignores the possibility that someone else other than me may be eligible to claim the credit.

Furthermore, even if I were a nonresident alien ineligible to claim the credit, nothing in the IRS regulations for Form 1098-T gives the educational institution the right, responsibility, or power to determine whether I might be eligible to claim the credit; nor does it permit them to deny a Form 1098-T to a nonresident alien’s request.

I’m not a lawyer.

Neither are the people at Penn who decided initially that I wouldn’t get a statement. But apparently I’m capable of reading the IRS documents and figuring out for myself what I’m entitled to.

What does this situation reveal about international students?

First, on the superficial level, this situation reveals that immigration status and residency for immigration purposes differs from tax status and residency for tax purposes. Clearly, not all employees who handle these cases are aware of these stipulations.

More importantly…

Even if we define international students to be non-citizens and non-permanent residents of the United States, this constituency is large, diverse, and varied, with complex needs based on their individual families’ statuses. It is a mistake to define broad, indiscriminate policies that treat all international students identically.

If you think I’ve made a mistake in this post, or wish to disagree with my conclusion here, I’d like to hear from you. Comment below or send me an email using the contact form.

Penn Engineering survey questions

Excerpts from the Penn Engineering student survey…

SEAS survey: “I can cope with being the only person of my race/ethnicity in a class”
Me: “Not applicable”

SEAS survey: select your ethnicity/citizenship…
Ethnicity or Citizenship question on survey

Me: why are these mutually exclusive?!

Lowering the bar on education isn’t the answer

The following article was initially drafted with a guest author, Kirill Peretoltchine, at the end of July 2012.

A giant statue in the opening ceremony of the Athens Summer Olympics in 2004, onto which laser images of geometrical shapes and scientific concepts were projected, was a powerful reminder of a bygone era. Ancient Greece was a birthplace of logical thought, education, mathematics, science… and democracy.

The Renaissance was marked by an explosion in the diffusion of ideas, and the naissance of the scientific method that has allowed us to explore this world. This was the time of Copernicus, Galileo, Michelangelo, and da Vinci — the last of which, far from being just a scientist and artist, was also an engineer and writer: the stunning definition of a Renaissance man.

And one of the founding fathers of the United States of America, Benjamin Franklin — also the founder of our alma mater — was a polymath himself. Politician, scientist, writer…

There is a reason we honour and respect figures like da Vinci and Franklin, even if we, enlightened with 21st century practicality, do not expect to educate the entire populace in their image.

Both of us were shocked to read a real proposal by an educator at the City University of New York for the lowering of educational standards and the removal of mathematics from standard curricula.

We agree that there are serious deficits in the North American educational system that are in need of redress. We also concur that it is impractical to teach higher math effectively to every high school and college or university student. But we are firm in our belief that lowering the bar isn’t the answer. Andrew Hacker has a limited view of mathematics that fails to appreciate its value, and his solution of removing math from standards is flawed.

Continue reading “Lowering the bar on education isn’t the answer”

Reflections on Penn

I’ve been attending classes for nearly three weeks here at the University of Pennsylvania, and in this short month I have already experienced many aspects of college life: meeting new people, making new friends, learning new things, trying new things, seeing new places, and so on… (This post was originally drafted in September 2011 but has been revised for December 2011; the new intro follows.)

Update (January 28, 2012): I’ve decided to remove password protection from this post and open it up to the world.

Update (December 2014): I’ve updated some of the campus photos, added links, and updated the objective factual statistics.

I just completed my first semester at the University of Pennsylvania. The past three months have brought me many joys: new friends, new experiences, and new knowledge. It’s been a rollercoaster of sorts—the cycles of stress due to impending exams, strange sleeping patterns, and a litany of decisions from picking courses to prioritizing assignments. It has been, however, rewarding.

College Hall, College Green, University of Pennsylvania

For those who have not yet left the warmth and comfort of a family home, the most important thing to know is that university life is quite unlike high school life. (You probably knew that already, but I wanted to confirm it nevertheless.) Yes, there will still be classes with people you know, but lectures are much bigger, and it is entirely possible that TAs and professors will grade your papers/tests without ever meeting you face to face. Of course, university life is also different in that you will be running your own life. I’ll elaborate on this later.

For those who are experiencing university for the first time as well, it will be interesting to compare your experiences to mine. Every university has its own unique atmosphere, level of academic rigour, diversity of students, breadth of opportunities, and social climate. Of course, there are some common traits, such as students’ immense freedom, increased responsibilities (not only in time management, but in eating well, shopping for basic living needs, doing laundry, etc).

To anyone who is reading this post, I want to make it clear that anything subjective I write is only my personal opinion. My perception of Penn, or of college life, may differ significantly from that of someone else in a different social circle, program of study, or undergraduate school; it may also differ from that of someone who is living a (virtually) identical life. Even if I am experiencing something joyful at Penn, I cannot guarantee that you would make the same conclusions after the same experiences. The same goes for anything I complain about. Still, this post will contain objective information about the educational experience at the University of Pennsylvania.

Locust Walk, University of Pennsylvania
Locust Walk, University of Pennsylvania

Notice of Americanism: I will use the term ‘college’ to refer to four-year institutions, like the University of Pennsylvania, interchangeably with the term ‘university.’ Don’t let this confuse you, my non-American reader.

Let’s jump right into how I feel about life at university in general.

Continue reading “Reflections on Penn”

Crossing the border

It’s ridiculously easy to get back into Canada from the United States, it seems, especially for a Canadian citizen.

“Where do you live?
“What were you doing in the States?
“What are you bringing with you?
“Any alcohol, tobacco, or controlled substances?
“Any weapons or firearms?”

Meanwhile, the guy is processing my passport in a reader. The whole interaction was under 20 seconds. Efficient enough, it seems.

When I entered the US on F-1 status, on the other hand, baggage had to go through an X-ray machine, questions were asked about fresh produce (why does that even matter), officers grilled other people for a long time, and the overall trip time gained about two hours from the border.

I don’t think there’s any difference in effective border safety/security on the two sides of this bridge.