IRS grants delay in tax reporting (1098-T) requirement change

May 23, 2016 02:26 pm

The Internal Revenue Service announced in late April that it will grant a delay in implementation of a change in tax reporting requirements for qualified tuition and related expenses on IRS form 1098-T. The UO joined with the National Association of College and University Business Officers (NACUBO) and other universities in asking for the delay.

The 1098-T form serves as verification of a student’s enrollment status and delineates the portion of a student’s charges that are “qualified tuition and related expenses.” A provision in the omnibus tax package passed in 2015, the Protecting Americans from Tax Hikes (PATH) Act, removed the ability of institutions to choose to report either “amounts billed” or “amounts received,” instead requiring the reporting of “amounts received.”

The announcement from the IRS states that institutions will not be penalized for continuing their current practice of reporting amounts billed (Box 2), rather than implementing an aggregate amount of payments received (Box 1) reporting by January 2017. Passage of the Protecting Americans from Tax Hikes Act (PATH Act) in 2015 mandated the change to payments received reporting, and many universities do not yet have the software solutions and in place needed for implementation.

The IRS is also planning to propose guidance governing institutional reporting requirements. Universities had expressed additional concerns that these proposals may address