2003 reporting requirements

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WELCOME TO TODAY’S
WEBCAST
1098-T Reporting
POSITIONING YOUR INSTITUTION FOR FULL FINANCIAL REPORTING
1:30 pm EDT
AGENDA
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Introduction
Overview of Desktop Tools
Presentation
Audience Survey
Question & Answer
Evaluation
INTRODUCTION
Mark Olson
Executive Vice President, Chief Operating
Officer - NACUBO
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1098-T REPORTING
POSITIONING YOUR INSTITUTION FOR
FULL FINANCIAL REPORTING
JOHN HARABEDIAN
RUTGERS UNIVERSITY
BARBARA WARREN
JOHNS HOPKINS UNIVERSITY
Topic 1
HOPE SCHOLARSHIP TAX
CREDIT
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$1,500 tax credit per
student (indexed for
inflation beginning in
2002)
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Applies to the first two
years of post-secondary
education
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Student must be
enrolled in a degree
program
HOPE SCHOLARSHIP TAX
CREDIT
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Students must meet
at least half-time
requirement
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Tax credit can be
claimed by the
student or parent
LIFETIME LEARNING TAX
CREDIT
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20% of first $10,000 of
expenses
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$2,000 maximum credit
per family (increased for
2003)
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Must acquire or improve
job skills
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Applies to credit &
noncredit courses
TAX CREDIT LIMITATIONS
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Only claim 1 credit per student
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Credits are phased out for adjusted gross income
over:
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Single:
$41,000-$51,000
Married: $82,000-$102,000
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Nonresident aliens are not eligible for credit
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Married filing separate returns are not eligible for
credit
TAX CREDIT DEFINITIONS
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IRC section #25A
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Qualified tuition and
related expenses (QTRE)
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First 2 years of post
secondary education
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Prepayment exception
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Reductions of qualified
tuition and fees
Topic 2
QTRE
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Tuition and fees required for enrollment
Test: Is the fee required to be paid to the
institution as a condition of
enrollment/attendance?
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Books, supplies, equipment (only if it must
be purchased from institution
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Student activity fees (if required for
enrollment)
QTRE
What does it exclude?
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Sports or hobby-related expenses (unless
part of the student’s degree program)
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Personal Expenses
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Room
Board
Insurance
Medical (including student health fees)
Transportation
2003 REPORTING
REQUIREMENTS [FORM 1098-T]
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Name, address, and ID #
Did the student attend at least half-time?
Is student enrolled in graduate program?
Contact name and telephone number.
BOX 7 only applies to tuition insurance providers.
REPORTING REQUIREMENTS
AMOUNTS TO REPORT
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Must elect between 2 methods:
1.
Total payments received for QTRE
[BOX 1]
or
2.
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Total amounts billed of QTRE
[BOX 2]
Adjustments for a prior year
[BOX 3]
REPORTING REQUIREMENTS
AMOUNTS TO REPORT (cont.)
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Scholarships or grants
processed by institution
[BOX 4]
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Adjustments made to
scholarships or grants
5]
[BOX
2003 REPORTING
REQUIREMENTS
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3 different boxes to be
checked:
1.If amount in Box 1 or 2
relates to the first three
months of the next year
[BOX 6]
2.If at least a half-time
student [BOX 8]
3.If graduate student [BOX 9]
2003 REPORTING
EXCEPTIONS
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Nonresident aliens
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Non-credit courses
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Qualified expenses waived or paid entirely
by scholarship
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Qualified expenses covered by formal billing
arrangement
2003 REPORTING
EXCEPTIONS (cont.)
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Qualified expenses are covered by formal
billing arrangement when:
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Institution is paid directly by employer, gov’t
entity or other institutional third party
and
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Institution does NOT maintain separate financial
account for individual student(s)
Topic 3
STATEMENTS REQUIRED ON
FORM 1098-T
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Tax information that is being furnished to the IRS
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Reporting method:
ž Amounts paid
ž Amounts billed
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Scholarships, grants and refunds may reduce credit
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Refer to relevant IRS forms and publications
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Institution contact information (name and phone
number) and, if applicable, service provider contact
information.
IRS PENALTIES
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Penalty for failure to file timely return with
the IRS
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Penalty for failure to furnish correct
information to the student
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Waiver for reasonable cause
Show acted in a “responsible manner”
THEN
ž Must solicit TIN at least once during the year
ž Must request TIN in writing (W9S satisfies
requirement)
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THANK YOU FOR YOUR
PARTICIPATION
Visit our website for more information
www.nacubo .org
This Webcast has been sponsored by:
Pearson Government Solutions
Providing a wide range of 1098-T reporting solutions to
American campuses.
Data management. Customer service. IRS reporting.
[email protected]
800-654-8341
www.ncspearson.com
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