How to Calculate Recapture of Education Credits

1. Figure out how much tuition you used to figure your original credit.
2. Find the amount that you received as a refund of tuition you originally used to claim the credit.
3. Subtract the amount in Step 2 from the amount in Step 1.

How much do you usually get back from 1098-t?

A form 1098-T, Tuition Statement, is used to help figure education credits (and potentially, the tuition and fees deduction) for qualified tuition and related expenses paid during the tax year. The Lifetime Learning Credit offers up to $2,000 for qualified education expenses paid for all eligible students per return.

Is there an amount shown in box 2 of your 2018 1098-t from this school?

For 2018, box 2 is no longer an option for reporting on Form 1098-T. If you have received a Form 1098-T with box 2 amounts instead of box 1, then your school has either not filed the forms correctly or they are using an outdated system of reporting.

How is recapture of credit calculated on Form 1098-T?

Note: The amount of the credit recapture is NOT the adjustment amount from the Form 1098-T. Rather it is the difference between the credit as it was originally calculated and the recalculated credit amount once the adjustment has been made to the tuition expense on the prior year return.

What happens in Box 2 of Form 1098-T?

In tax years prior to 2018, the school could report the amount billed in Box 2 of form 1098-T. This box is now blank. Generally, if you used the amount in Box 2 in a previous year, the IRS would ask for proof that the payments were made to the school.

Do you have to report excess on 1098-T?

You must report the excess as taxable income on your federal return. To do this within the program, please go to: The amount in box 5 is LESS THAN the amount in Box 1 (or Box 2, whichever is filled in on your 1098-T), then you can use the expenses as a deduction or credit. Subtract Box 5 from Box 1 (or Box 2).

What happens to the tuition and Fees deduction on Form 1098-T?

In the event that Form 1098-T Box 6, shows an adjustment to scholarships or grants for a prior year. This adjustment amount may also affect the amount of any allowable tuition and fees deduction or education credit that was claimed for the prior year if it shows that the scholarships or grants reported in a prior year have been reduced.