Question has to do with lack of 1098 for son’s final college semester - spring 2016. He received a 1098 in January 2016 for the entire 2015-16 year - billed for spring 2016 semester in December 2015. But we took out a Parent Plus loan and those funds were disbursed 1/21/2016.
My understanding is that borrowed funds count and the funds were disbursed in 2016 so we should be able to take AOTC for 2016. But his university will not issue a 1098 for 2016 as they billed the whole year amount in 2015.
We took the AOTC in 2013, 2014 and 2015 so I am eligible to take it in 2016. I meet all eligibility requirements - except for not having the darn 1098. I can document the loan disbursement on 1/21/2016.
Is there any way to take the AOTC in 2016 without the 1098? If not - is there anything else I can do without a 1098?
Having a 1098-T is NOT an eligibility requirement for taking the AOTC. The 1098-T is pretty much a worthless document, especially if the school elects to report qualified amounts billed instead of payments received. Take the credit.** You don’t need a 1098-T to show that you paid qualified expenses in 2016.
** As long as you qualify in all other regards, such as continuing to claim your son as a tax dependent in 2016 and taking the dependent exemption for him.
That’s encouraging - I have the spring semester bill showing funds paid 1/25/2016 and I have my Parent Plus loan disbursement confirmation showing funds disbursed 1/25/2016 - so I feel I can document it pretty well. I just don’t want an IRS hassle - as the 2016 1098 shows all blanks. The 2015 1098 does have a check mark in box 7 - indicating it includes amounts for a semester that begins in 2016.
As long as the expenses were paid in 2016 for an academic period that began in 2016 or the first three months of 2017, you will be alright (and all other requirements have been satisfied).
Thank you! This is quite exciting.
Based on what rockvillemom has posted, the school has done everything it needs to do. A 1098-T has been issued that covers all qualified expenses billed. Nothing the school can do will alter OP’s eligibility to claim the AOTC.
The school did send a 2016 1098 - but it is essentially blank. (I originally said they would not issue a 2016 1098 - that was wrong - I just found it on their website. So - I do have a 2016 1098 - it is just that nothing is filled in for boxes 1 or 2).
I just read the entire AOTC section on the IRS website - and I do think I can take the credit. Up until today - I thought I had no way to do it - so I thank you very very much!
From the form 8863 instructions:
You may receive Form 1098-T, Tuition Statement, from the
institution reporting either payments received in 2016 (box 1) or
amounts billed in 2016 (box 2). However, the amount in box 1 or
2 of Form 1098-T may be different from the amount you paid (or
are treated as having paid). In completing Form 8863, use only
the amounts you actually paid (plus any amounts you are treated
as having paid) in 2016
So - I am reading this and comments above as to not worry about the lack of amounts on the 1098 - since I have a tuition bill showing loan disbursement 1/25/2016 for the 2016 spring semester. No question I can document that I paid funds in 2016 for 2016.