1. The Dastardly 1098T Form 2012 CASFAA Annual Conference December 8 – 11, 2012 Anaheim, CACASFAA Annual Conference A Quick Insight from the Bursar Side of the House Laurelle Swan, Vice President, West Coast Region, ECSI December 10, 2012

2. Purpose of the 1098T Form 2012 CASFAA Annual Conference December 8 – 11, 2012 Anaheim, CACASFAA Annual Conference What is the 1098T Document? Used by eligible educational institutions to report information about their students to the IRS Required by the TaxPayer Relief Act of 1997 Reports amounts pertaining to qualified tuition and related expenses, scholarships, and grants What is the student supposed to do with the 1098T? This is an informational form Serves to alert students that they may be eligible for federal income tax education credits

3. Process for Issuing 1098T Forms 2012 CASFAA Annual Conference December 8 – 11, 2012 Anaheim, CACASFAA Annual Conference Key Critical Dates 1098T must be delivered by January 31 Data must be submitted to the IRS by March 31 Corrections must be completed between February 1 through March 31 In-House Processing vs. Outsource Processing: Six Critical Steps File processing – gathering all fees in the appropriate categories Validation of the data gathered during file processing Loading the 1098T form with data gathered Re-validation of the data loaded into the 1098T form Printing of the 1098T form, whether paper or electronic Mailing/delivery of the 1098T form

4. 1098T Form for 2012 2012 CASFAA Annual Conference December 8 – 11, 2012 Anaheim, CACASFAA Annual Conference A

5. Box 1 or Box 2 2012 CASFAA Annual Conference December 8 – 11, 2012 Anaheim, CACASFAA Annual Conference Box 1 - Payments Received for Qualified Tuition and Expenses Pros Reports in a way that most taxpayers claim (cash basis) Reports in the year that installments are paid Cons May be harder to track and therefore report Must also track refunds Box 2 – Amounts Billed for Qualified Tuition and Expenses Pros Reporting can be easier for the university Most schools are post-pay so it follows business process Cons Reports in a way that makes the taxpayer “calculate” their deduction Cross of tax years’ confuses taxpayers (spring billing in Nov/Dec)

6. Boxes 4 - 6 2012 CASFAA Annual Conference December 8 – 11, 2012 Anaheim, CACASFAA Annual Conference Box 4 – Adjustments made for prior years Shows any refunds during the current year for payments reported on a 1098T for a prior year Refunds may be the result of changing from full-time to part- time, non-resident to resident classification, or cancellation/withdrawal Box 5 – Scholarships or Grants Shows the net amount of certain forms of educational assistance that were received or applied to the student account during the tax year Box 6 – Adjustments to scholarships or grants for a prior year Shows amount of scholarships or grants that were reported on a 1098T for a prior year that were adjusted or reduced in the current year

7. Boxes 7 - 9 2012 CASFAA Annual Conference December 8 – 11, 2012 Anaheim, CACASFAA Annual Conference Box 7 – Payments received in Box 1 include Pre-Paid Regular Session Fees Prepaid fees are those paid during the tax year for a quarter beginning in the first 3 months of the following tax year Box 8 – Enrolled at least half-time This box indicates if the student was considered to be enrolled at least half-time for one or more quarters Box 9 – Enrolled in a graduate program This box indicates if the student was enrolled in a graduate program for one or more quarters during the tax year

8. Social Security Numbers 2012 CASFAA Annual Conference December 8 – 11, 2012 Anaheim, CACASFAA Annual Conference Truncation Pilot years are 2011 and 2012 No application to pilot, OK to just truncate Require a SSN Students must provide the university an SSN University must attempt to get an SSN or TIN each year University must still file a 1098T without the SSN “Filler” SSN 000-00-0000 or 999-99-9999 OK to report to IRS so long as you attempt to get an SSN from the student

9. International Students & ITINS 2012 CASFAA Annual Conference December 8 – 11, 2012 Anaheim, CACASFAA Annual Conference Non-Resident Alients Not required to provide 1098T UNLESS it is requested International Students Not required to provide 1098T but not prohibited TINS You can replace blank or “false” SSN with TIN if it has been collected from the student

10. Veteran’s Chapter 33 & Other 3 rd Party Sponsors 2012 CASFAA Annual Conference December 8 – 11, 2012 Anaheim, CACASFAA Annual Conference Must be reported in Box 5 Third party sponsorship or scholarship? Any university administered payment must be reported How does the Bursar’s Office work with the Financial Aid Office to accomplish this?

11. Qualifying Expenses 2012 CASFAA Annual Conference December 8 – 11, 2012 Anaheim, CACASFAA Annual Conference Generally means tuition and fees required for enrollment or attendance Exceptions for sports, hobbies or games, unless it is part of a degree program Non academic fees – term does not include student activity fees, athletic fees, insurance expenses or other expenses not related to an individual’s academic course of instruction

12. IRS Audits of Students 2012 CASFAA Annual Conference December 8 – 11, 2012 Anaheim, CACASFAA Annual Conference Cash basis filers can only deduct the amount paid They are rejecting the deduction because the 1098T cannot be the documentation to substantiate the deduction Encourage student to retain cancelled checks, bank statements and credit card receipts

13. Issues your colleagues are grappling with: 2012 CASFAA Annual Conference December 8 – 11, 2012 Anaheim, CACASFAA Annual Conference Parents questioning how the institution generates and processes billing and financial aid disbursements which result in a timing difference for 1098T reporting Students receiving 100% of qualified tuition and fees from a third party What is included in “Financial Assistance”? Employer educational benefits? AmeriCorps? Veteran’s Benefits? Are VA benefits a “benefit” or a “scholarship or grant”? What does “administered and processed” mean?

14. Thank you! 2012 CASFAA Annual Conference December 8 – 11, 2012 Anaheim, CACASFAA Annual Conference For additional information, please SEE YOUR BURSAR