U.S. · Tax forms
1098-T box 1 payments received.
How box 1, box 5 and the checkboxes on the tuition statement feed the education credits.
Form 1098-T comes from your school. Box 1 is payments received for qualified tuition and related expenses, less refunds, and is not reduced by scholarships. Box 5 is scholarships and grants the school processed. For the education credit on Form 8863 you use what you actually paid, not just box 1, reduced by tax-free assistance. The American opportunity credit is 100% of the first $2,000 and 25% of the next $2,000 of adjusted expenses.
Estimate the American opportunity credit
Result
Form 1098-T boxes
| Box | Meaning | Where it goes (per the IRS instructions) |
|---|---|---|
| Box 1 | Payments received for qualified tuition and related expenses: Total payments from all sources during the calendar year, less reimbursements or refunds made in the year for the same year’s payments. Not reduced by box 5 scholarships. Includes past-due amounts from a prior year if the school billed the student. | Form 8863: use only the amounts you actually paid (or are treated as paid), not box 1 alone. |
| Boxes 2-3 | Reserved: Reserved for future use. | None. |
| Box 4 | Adjustments made for a prior year: Reimbursements, refunds or reduced charges made this year that relate to payments or amounts billed reported for a prior year after 2002. | Prior-year adjustment reported by the school. |
| Box 5 | Scholarships or grants: Scholarships and grants the school administered and processed for the cost of attendance, including payments from third parties other than family members and loan proceeds. A Pell Grant always counts. | Reduces adjusted qualified expenses to the extent it is tax free. |
| Box 6 | Adjustments to scholarships or grants for a prior year: Reductions to scholarships or grants reported for a prior year after 2002. | Prior-year adjustment. |
| Box 7 | Academic period starting in January through March of next year: Checked if payments reported in box 1 relate to an academic period beginning in the first three months of the next year. | Such prepaid expenses can count for the credit in the year paid. |
| Box 8 | At least half-time student: Checked if the student was at least a half-time student during any academic period beginning in the year. | Form 8863 line 24, American opportunity credit eligibility. |
| Box 9 | Graduate student: Checked if the student was enrolled in a graduate-level program. | Reported for the student’s information. |
| Box 10 | Insurance contract reimbursements or refunds: Total reimbursements or refunds of qualified expenses an insurer paid to the student. | Insurer reimbursements of qualified expenses. |
Box 1 is not the number for Form 8863
The Form 8863 instructions say the box 1 amount can differ from what you paid. Use only the amounts you actually paid, or are treated as having paid, reduced by tax-free educational assistance. Qualified expenses paid by someone other than the student, such as a relative, are treated as paid by the student, and expenses paid by a student you claim as a dependent are treated as paid by you. Scholarships in box 5 reduce your expenses only to the extent they are tax free. A scholarship the student includes in income is not treated as tax-free assistance if its terms require or allow it to be used for room, board or other non-qualifying costs.
Worked example
Maya paid $6,000 of qualified expenses in the year and received $1,000 of tax-free scholarship. Adjusted qualified expenses are $5,000. Only $4,000 counts for the American opportunity credit, so the credit is $2,000 plus 25% of $2,000, or $2,500, before any income phase-out. Up to 40% of the credit may be refundable. The calculator above runs the same steps.
Edition note
The Form 1098-T instructions read are the 2026 edition, which refers to academic periods beginning in 2027 for the box 7 checkbox. If the form you received differs, match boxes by their printed labels. The Form 8863 figures are from the 2025 edition.
More form decoders
Compare credits in the AOTC and lifetime learning credit calculator. Withdrawals from a 529 plan are decoded on the 1099-Q page.
Sources
- Instructions for Forms 1098-E and 1098-T: Specific Instructions for Form 1098-T: boxes 1 to 10. Read November 2, 2026.
- Instructions for Form 8863 (2025): Form 1098-T requirement; Qualified Education Expenses; Adjusted Qualified Education Expenses; American Opportunity Credit. Read November 2, 2026.
IRS pages last reviewed April 30, 2026. Credit amounts and line numbers are those printed in the 2025 Form 8863 instructions and can change.
Frequently asked questions
What is box 1 on Form 1098-T?
Payments received for qualified tuition and related expenses from all sources during the calendar year, less refunds and reimbursements made that year. Scholarships in box 5 do not reduce it.
Should I use box 1 on Form 8863?
Not by itself. The instructions say to use only the amounts you actually paid, or are treated as having paid, reduced by tax-free educational assistance.
What is box 5 on a 1098-T?
Scholarships or grants the school administered and processed during the year, including Pell Grants and other third-party aid except family payments and loan proceeds.
How much is the American opportunity credit?
Up to $2,500 per eligible student: 100% of the first $2,000 and 25% of the next $2,000 of adjusted qualified education expenses. Up to 40% may be refundable.
Can I claim a credit without a 1098-T?
Sometimes. The Form 8863 instructions allow it when the school is not required to furnish one, or you take the steps the instructions describe when the school fails to send one.
Not tax advice
This page summarizes IRS instructions, mostly written for the people who prepare the form, and is not tax, legal or financial advice. The payer, a CPA or an enrolled agent can confirm what a box or code means for your return. Everything runs in your browser; nothing you enter is sent anywhere.