The Internal Revenue Service (IRS) requires universities, colleges and post-secondary institutions who received “qualified educational expenses” to complete 1098-T tax forms for eligible students in the preceding tax year. As with other information returns, the form must be sent to the student by January 31. Complying with the reporting requirements for IRS form 1098-T has been a difficult process for many educational institutions. Over the past few years, the IRS has made changes to the tax form because of errors in reporting, specifically with Box 1 and Box 2. We’re going to provide an overview of those changes and solutions for being in compliance to avoid IRS penalties. Changes made to 1098-T In 2016, the IRS first introduced significant changes that required educational institutions to report payments received for qualified tuition and related expenses (QTRE) rather than the amount billed to students. Prior to these changes, educational institutions were allowed to provide students with payments received (Box 1) and the amount billed (Box 2) for QTRE. The problem was that individual filers accidentally misreported their college expenses when benefits like scholarships were involved. Unfortunately, many people filing were not subtracting any scholarship amount from the total amount billed, leading to inaccurate reporting of funds the university received. Now, colleges and universities are no longer able to report amounts billed for QTRE in Box 2 on 1098-T forms. They must report payments in Box 1. The IRS is now enforcing reporting changes and as Box 2 is grayed out. These changes mean universities must now redesign their system to start reporting via Box 1 only. Find out more on 1098 forms here. Recommendations for completing the form A lot of educational institutions have struggled with these changes due to in-house printing and reporting on legacy systems. To comply with IRS requirements, schools should know who qualifies for a 1098-T …