Frequently Asked Questions About
 "Information for Determining Federal Tax Benefits for
Higher Education Expenses" (Financial Supplement)


What is IRS Form 8863?
How can I get a copy of IRS Form 8863?
How can I get a copy of my "Information for Determining Federal Tax Benefits for Higher Education Expenses" (financial supplement)?
Can I get a copy of last year's financial supplement?
Was the data on the financial supplement reported to the IRS?
How do I know if I am eligible for an education tax credit?
What are the "Payments Received for Tuition and Related Expenses" seen in Part 1 of the financial supplement?
Why is the amount provided for "Payments Received for Tuition and Related Expenses" less than the amount I paid to UCI?
What are the "Scholarships and Grants" seen in Part 2 of the financial supplement?
Why are separate totals provided for Parts 1 and 2?  Why not give a net amount of "Payments Received" less "Scholarships or Grants"?
Why has prior year information been provided?
Why do I have an amount under "Qualified Education Expenses Reversed or Refunded"?
Why do I have an amount under "Gift Aid and Fee Reductions Reversed or Disbursed?
I don't agree with the amounts shown on my "Information for Determining Federal Tax Benefits for Higher Education Expenses" (financial supplement).  What should I do?

The information provided in this web page is NOT tax advice.  It is offered only as general information for UCI students and their families.  Please consult a qualified tax expert for advice on computing, claiming, or determining qualification for any tax benefit mentioned in this web site.


Question: What is IRS Form 8863?

Answer: Form 8863: Education Credits [download] is the IRS worksheet needed to figure and claim the Hope or Lifetime Learning tax credits.

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Question: How can I get a copy of IRS Form 8863?

Answer: One easy way is to download the form in Portable Document Format (PDF) from the list of forms found in the Downloads section of this web site. You will need a copy of Adobe™ Acrobat™ Reader (available free of charge from Adobe Systems) to view and print PDF files.  If you need another option for obtaining forms, read Tax Topic 155:   Forms and Publications - How to Order, for alternative methods.

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Question:  How can I get a copy of my "Information for Determining Federal Tax Benefits for Higher Education Expenses" (Financial Supplement)?

Answer: It's easy!  Just use the Tax Credit Reporting Service (TCRS) student site at http://www.1098t.com/.

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Question:  Can I get a copy of last year's financial supplement?

Answer:  Yes.  Follow the instructions above, and be sure to select the tax year of interest from the  drop-down menu box .  The current tax year appears in the window by default.

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Question:  Was the data on the financial supplement reported to the IRS?

Answer:  No.  The IRS waived the requirement of reporting student financial information for tax year 1998 (see IRS Notice 97-73 [download]), for tax year 1999 (see IRS Notice 98-46 [download]), for tax year 2000 (see IRS Notice 99-37 [download]), tax year 2001 (see IRS Notice 2000-62 [download]), and again for tax year 2002 (see Final Regulations dated December 19, 2002) [download] ; therefore, such data were not sent to the IRS for UCI students for any tax year.  Recognizing that financial information may be very useful in completing tax returns, however, the University elected to supply this data to our students.

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Question:  How do I know if I am eligible for an education tax credit?

Answer: Determining eligibility for an education tax credit is the responsibility of the student, taxpayer, or tax professional.  Individual circumstances, such as the taxability of a student's "Adjustments to Qualified Expenses", make it impossible for the University to apply a standard formula.  Furthermore, University employees and TCRS customer service representatives are not permitted to dispense tax advice.

Form 1098-T and the associated "Information for Determining Federal Tax Benefits for Higher Education Expenses" (financial supplement) were issued by the University to assist you in determining your eligibility for the Hope or Lifetime Learning tax credits.  IRS Publication 970:   Tax Benefits for Education [download] and Form 8863:  Education Credits [download] are useful resources that contain detailed criteria for eligibility, guidelines for choosing which credit to claim, and instructions for figuring the amount of credit.  Students with questions about the taxability of their "Scholarships and Grants" may wish to consult Publication 520:  Scholarships and Fellowships [download]  for more information.

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Question:  What are "Payments Received for Tuition and Related Expenses" seen in Part 1 of the financial supplement?

Answer: "Payments Received for Tuition and Related Expenses" are "qualified tuition and related expenses" that students must pay to be enrolled at the University.  Most registration and lab fees assessed at UCI are classified as "qualified tuition and related expenses."   For more information, read the discussion on the "Definitions" page in this web site.

The Hope and Lifetime Learning tax credits are based on the amount of "qualified tuition and related expenses" paid during the tax year; see "What Expenses Qualify?" for either the Hope or Lifetime Learning credit in IRS Publication 970: Tax Benefits for Education [download].  The amount in "Part 1: Payments Received for Tuition and Related Expenses"  on the "Information for Determining Federal Tax Benefits for Higher Education Expenses" (financial supplement) form was provided to assist eligible taxpayers in figuring and claiming an education tax credits using IRS Form 8863: Education Credits [download].

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Question:  Why is the amount provided for "Payments Received for Tuition and Related Expenses" less than the amount I paid to UCI?

Answer: One possibility is that a portion of your payment corresponded to fees that cannot be classified as "qualified tuition and related expenses."  The IRS disqualifies the costs of insurance, room and board, and transportation, even if these fees must be paid as a condition of enrollment.  (See "Expenses That Do Not Qualify" for either the Hope or Lifetime Learning credit in IRS Publication 970: Tax Benefits for Education [download] for more information.)

Another possibility is that a portion of your payment was refunded after a change in enrollment status (dropping from full-time to part-time, changing from non-resident to resident, or withdrawing).  The IRS states that qualified education expenses cannot include expenses that are refunded. (See "Refunds" under "Adjustments to Qualified Expenses" for either the Hope or Lifetime Learning credit in IRS Publication 970: Tax Benefits for Education [download] for more information.)

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Question:  What are "Scholarships and Grants" seen in Part 2 of the financial supplement?

Answer:  The category "Scholarships and Grants" includes many sorts of "gift aid" and "fee reductions" that may be identified as funds that students normally are not required to repay.    Besides scholarships and grants, other common types of "gift aid" are fellowships and traineeships.  Fee reductions are credits applied to registration fees to decrease the balance owed by the student.  Examples include waivers and tuition/fee remissions.  For more information, read the discussion on the "Definitions" page in this web site.

"Scholarships and Grants" may be viewed as "Adjustments to Qualified Expenses," if they are claimed as tax-free funds.  As stated under "Adjustments to Qualified Expenses" for either the Hope or Lifetime Learning credit in IRS Publication 970: Tax Benefits for Education [download], tax-free educational assistance may include scholarships, Pell grants, employer-provided educational assistance, veterans' educational assistance, and any other nontaxable payments (other than gifts, bequests, or inheritances) received for educational expenses.  Taxpayers are instructed to reduce the total of their "qualified tuition and related expenses" by any tax-free educational assistance.   

The amount in "Part 2:  Scholarships and Grants" on the "Information for Determining Federal Tax Benefits for Higher Education Expenses" (financial supplement) was provided to assist eligible taxpayers in computing any reduction in "qualified tuition and related expenses" when claiming an education tax credit using IRS Form 8863: Education Credits [download].

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Question:  Why are separate totals provided for Parts 1 and 2?  Why not give the net amount of "Payments Received" less "Scholarships or Grants"?

Answer:   "Qualified tuition and related expenses" are characterized by the purpose of the expense and its payment date (see "What Expenses Qualify?" for either the Hope or Lifetime Learning credit in IRS Publication 970:  Tax Benefits for Education [download]).  The University can use these criteria to determine "qualified tuition and related expenses" because it assesses fees and collect their payments.  A total may then be calculated as "Payments Received for Tuition and Related Expenses," because no information is needed about the taxpayer, only the fees themselves.

In contrast, calculations involving "Scholarships and Grants" do require knowledge of the taxpayer, as well as the type of aid.  The "Adjustments to Qualified Expenses" section for either the Hope or Lifetime Learning credit in IRS Publication 970: Tax Benefits for Higher Education [download] states that educational assistance should be subtracted from "qualified tuition and related expenses" only if the aid is tax-free.  The University does not record whether or not a taxpayer will report "Scholarships and Grants" as taxable income (students may read IRS Publication 520:  Scholarships and Fellowships [download] for taxability rules) .  Recognizing that an incorrect assumption regarding the taxability of aid could lead to an erroneous figure, the University leaves calculations to the taxpayer using IRS Form 8863: Education Credits [download].

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Question:  Why has prior year information been provided?

Answer:  The IRS' rule against double benefit even applies to prior years.  Beginning with tax year 1999, taxpayers are advised to repay any portion of a previous tax year's education tax credit corresponding to educational expenses reimbursed during the current tax year.  This procedure is known as "recapturing " a tax credit. (See "When Must the Credit Be Repaid (Recaptured)?" for either the Hope or the Lifetime Learning credit in IRS Publication 970: Tax Benefits for Education [download] for further information.) 

To aid eligible taxpayers in computing any recapture amount that may be appropriate, "Part 3:  Adjustments Made for a Prior Year to Qualified Tuition and Related Expenses" and "Part 4: Adjustments Made for a Prior year to Scholarships and Grants" on the "Information for Determining Federal Tax Benefits for Higher Education Expenses" (financial supplement) form include any tax year 2002 adjustments to prior year tax amounts.  If amounts are shown in these parts, then transactions processed in tax year 2002 may affect any tax credit you claimed for a previous year.

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Question:  Why do I have an amount under "Adjustments Made for a Prior Year to Qualified Tuition and Related Expenses"?

Answer:  The most likely answer is that you changed enrollment status during the Winter 2002 quarter. If you dropped from full-time to part-time, changed from non-resident to resident, or withdrew from that quarter, then you probably received a credit in 2002 for registration fees ("qualified tuition and related expenses") paid in 2001.  By viewing the financial information displayed on your "Information for Determining Federal Tax Benefits for Higher Education Expenses" (financial supplement) form online at http://www.1098t.com/, you can use any links under "Adjustments Made for a Prior Year to Qualified Tuition and Related Expenses" to obtain financial details about the prior year information.

IRS Publication 970: Tax Benefits for Education [download] states that you must refigure a previous year's tax credit if you receive a refund of qualified expenses in the current tax year; see "When Must the Credit Be Repaid (Recaptured)?"  for either the Hope or the Lifetime Learning credit in that publication for further information.  Full or partial refunds of registration fees that crossed tax years are listed and summed in Part 3 of the financial supplement form to assist you in computing a recapture amount (if applicable), when completing IRS Form 8863: Education Credits [download]

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Question:  Why do I have an amount under "Adjustments Made for a Prior Year to Scholarships and Grants"?

Answer:  You may have received a late disbursement of gift aid in 2002, for a quarter that began in 2001.  The usual scenario involves receiving Fall 2001 financial assistance later in the academic year (Winter 2002 or Spring 2002).  By viewing the financial information displayed on your "Information for Determining Federal Tax Benefits for Higher Education Expenses" (financial supplement) form, online at http://www.1098t.com/, you can use any links under "Adjustments Made for a Prior Year to Scholarships and Grants" to obtain financial details about the prior year information.

Winter 2002 disbursements of "Scholarships and Grants" from UCI's Office of Financial Aid and Scholarships were classified as tax year 2002 transactions, even though registration fees for that quarter were payable in the previous tax year.  Since Winter 2002 quarter did not begin until 01/03/2002, disbursements for that quarter were not considered to be tax year 2002 adjustments to prior year amounts.

IRS Publication 970: Tax Benefits for Education [download] states that you must refigure a previous year's tax credit if, during the current tax year, you received tax-free educational assistance towards the prior year's qualified expenses; see "When Must the Credit Be Repaid (Recaptured)?" for either the Hope or the Lifetime Learning credit  in that publication for further information.   Late disbursements are listed in "Part 4: Adjustments Made for a Prior year to Scholarships and Grants" on your "Information for Determining Federal Tax Benefits for Higher Education Expenses" (financial supplement) form to assist you in computing a recapture amount (if applicable) when completing IRS Form 8863: Education Credits [download].

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Question:  I don't agree with the amounts shown on my "Information for Determining Federal Tax Benefits for Higher Education Expenses" (financial supplement).  What should I do?

Answer:  The information on the form represents the University's "good faith effort" to provide financial details that are as complete and as accurate as possible prior to the implementation of  final reporting guidelines from the IRS.  If you are concerned that our figures do not match yours, remember that the IRS waived the requirement of reporting student financial information for tax year 1998 (see IRS Notice 97-73 [download]), tax year 1999 (see IRS Notice 98-46 [download]), tax year 2000 (see IRS Notice 99-37 [download]), tax year 2001 (see IRS Notice 2000-62 [download]), and again for tax year 2002 (see Final Regulations dated December 19, 2002); therefore, such data was not sent to the IRS for UCI students for any tax year.  Any questions or problems with figuring and claiming an education tax credit should be addressed to a tax professional or to the IRS.

Using figures from the financial supplement to complete IRS Form 8863: Education Credits [download], or any portion of your tax return, is not required for tax year 2002.  The amounts shown were provided only to students, and merely as a courtesy.  You are not required to attach either your 1098-T or your financial supplement to your return.  In fact, a UCI student may complete his/her tax return even if he/she never receives a 1098-T or a financial supplement.  As stated on each 1098-T form issued to UCI students, "your personal financial records serve as the official supporting documentation for your federal tax return."

Note to UCI Students in International Education Programs:

If you received a 1098-T from UCI, you will note that the associated "Information for Determining Federal Tax Benefits for Higher Education Expenses" pertains only to those quarters for which you paid and attended classes at this campus.  Depending on your international education program, you may receive an additional 1098-T from the University of California Education Abroad Program.  Tax year 2002 documents were issued from the systemwide office on 01/27/2003

If you are missing a 1098-T from either source, or if you need to retrieve your education tax credit information from abroad, then be sure to log in at the Tax Credit Reporting Service (TCRS).

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The information provided in this web page is NOT tax advice.  It is offered only as general information for UCI students and their families.  Please consult a qualified tax expert for advice on computing, claiming, or determining qualification for any tax benefit mentioned in this web site.


Further information is available from:

U.S. Department of Education

U.S. Department of Education
(800) USA-LEARN or TTY (800) 437-0833
¤ President Bush's Tax Programs Great for America's Families...

Internal Revenue Service

Internal Revenue Service
(800) 829-1040 or TTY (800) 829-4059

¤ Publication 970:  Tax Benefits for Higher Education
¤ Tax Topic 456:  Student Loan Interest Deduction
¤ Tax Topic 605:  Education Credits
¤ FAQ:  Hope & Lifetime Learning Educational Credits
¤ FAQ:  Student Loan Interest Deduction
¤ Tax Trail:  Education Tax Credits
¤ Tax Trail:  Student Loan Interest
¤ Tax Trail:  Deduction for Higher Education Expense

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