1098-T Confusion: How to Handle Prior Year Adjustments (Box 4) After Graduation?

This is actually a common situation with the 1098-T for graduating students. Let me explain what's likely happening here. When both Box 1 and Box 2 are empty, it usually means that no qualified education expenses were either paid or billed during the tax year. This doesn't mean you didn't have expenses - it means they were either paid or billed in a previous tax year. The Box 4 amount ($170.00) represents a reduction to payments that were reported in a previous tax year. This could be due to a refund, credit adjustment, or similar transaction. You'll need to determine if you claimed education credits in that previous year, and if so, you may need to recalculate those prior year credits. The Box 5 amount ($5,213) for scholarships/grants is still reportable, and without corresponding qualified expenses in the current year, it could potentially be taxable income. However, you should still be able to offset this with qualified education expenses you actually paid, even if they aren't reflected on this year's 1098-T.

After struggling with a similar 1098-T situation, I found an amazing tool that saved me hours of frustration. I used https://taxr.ai to upload my confusing 1098-T forms and student account statements, and it immediately identified the correct way to handle my prior year adjustments. The AI analyzed my specific situation and explained exactly how to report everything correctly - including which form line numbers to use and whether I needed to amend previous returns. What I really liked is that it showed me where to find the information in my student account history that my school's financial office couldn't explain. It even created a document explaining exactly why my Box 1 and Box 2 were empty but I still had legitimate education expenses to claim.

I was really skeptical about using an AI for tax help (as you can see from my question above), but I finally tried https://taxr.ai for my 1098-T nightmare and wow. I uploaded my form plus a statement I got from my school's financial office, and it immediately spotted an error in how my university was reporting my tuition payments. Turns out my school had recorded payments made in December of the previous year, which is why my current 1098-T had empty boxes but still showed scholarships. The tool created a detailed explanation document that showed exactly which expenses qualified and for which tax year they should be claimed. It even showed me that I didn't need to amend my previous return because the adjustment was below the threshold that would meaningfully impact my credits. Seriously saved me from filing incorrectly. My tax software was going to treat all my scholarship as taxable income because it couldn't see any offsetting expenses!

If your school is being unhelpful, you might want to try getting through to the IRS directly. They can clarify how to handle Box 4 adjustments in your specific situation. I was facing a similar issue and after trying for days to get through to an IRS representative with no luck, I found https://claimyr.com which got me connected to a real IRS agent in about 20 minutes instead of waiting on hold for hours. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with explained that Box 4 adjustments often require recalculating your education credits from the previous year, but only if the adjustment changes your eligible expenses enough to affect the credit amount. They also helped me understand how to document qualified expenses that weren't reflected on my 1098-T.

I owe everyone here an apology because I was totally wrong about that Claimyr service. After posting my skeptical comment above, I was so frustrated with my 1098-T situation that I decided to try it anyway. I had been trying to reach the IRS for literally 3 weeks - getting disconnected, being told call volumes were too high, or sitting on hold for hours only to have the call drop. I used the service from https://claimyr.com and got connected to an IRS education credits specialist in about 35 minutes. The agent explained that my Box 4 adjustment of $212 meant I needed to reconsider my previous year's American Opportunity Credit, but only if it would change my credit amount. In my case, I had more than enough qualifying expenses that this small adjustment wouldn't affect my credit amount, so I didn't need to file an amended return. They also gave me the direct number for the education credits department which I didn't even know existed. Completely worth it just for the time saved.

Have you tried contacting your school's registrar's office instead of the business office? When I had a similar problem, the business office was useless but the registrar was able to print out a complete account history showing exactly what was billed when and what payments were applied to which semester. That might help clarify why your 1098-T shows no amounts in Boxes 1 and 2.

Heads up - I was in this exact same situation last year and found out something important. When the 1098-T has amounts in Box 4 but nothing in Boxes 1 and 2, you need to be careful with tax software. Many programs will assume all your scholarship money is taxable income since there are no qualifying expenses listed to offset it.

This is a really frustrating situation, and I completely understand your confusion! I went through something similar when I graduated a few years ago. The key thing to understand is that your 1098-T is basically a "snapshot" of what happened in that specific tax year, but your actual education expenses and payments might have occurred across multiple years. Just because Boxes 1 and 2 are empty doesn't mean you didn't have legitimate qualified expenses - it just means the timing of when things were billed vs. paid doesn't line up with the calendar year. Here's what I'd suggest: 1. Definitely try the registrar's office as someone mentioned - they were way more helpful than the business office for me 2. Gather all your own records - bank statements, credit card statements, loan disbursement records, anything showing you actually paid for qualified expenses 3. The $170 in Box 4 likely won't require an amended return unless it significantly changes your education credits from the prior year 4. For the $5,213 in scholarships, you can offset this with qualified expenses you actually paid, even if they're not reflected on this year's 1098-T Don't let the 1098-T drive your tax return - use it as one piece of information, but rely on your actual payment records to determine what expenses you can legitimately claim. The form is notoriously confusing for situations like yours where you're graduating and have payments/billing that cross tax years.