Got a 2021 1098-T form but I graduated in 2020 - what to do?

I'm super confused and hoping someone can help me out here. I just received a 2021 1098-T form from the university I graduated from back in December 2020. The weird thing is, I never took any classes in 2021 and definitely didn't pay for any education expenses that year. I was working full-time at my new job by then! When I look at the form, it only shows partial information in Box 1 (about $875) but nothing else is filled out. I'm 99% sure this is a mistake by the university, but I don't want to just ignore it since it might affect my taxes. Should I contact the university's financial aid office? Do I need to report this on my taxes even though I know it's wrong? Has anyone dealt with something similar before? Really don't want to mess up my return over the university's clerical error!

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18 comments

Oliver Becker

•8M

This happens more often than you'd think! Universities sometimes issue 1098-Ts for payments that were processed in a different calendar year than when classes were taken. What likely happened is that you either had a late payment post for your Fall 2020 semester that hit their system in January 2021, or there was some kind of adjustment to your account (maybe a scholarship or grant) that processed in 2021. Box 1 shows payments received, so that $875 represents money that changed hands in 2021 according to their records. I'd recommend contacting your university's bursar or student accounts office (not financial aid) and ask them to explain why you received this form. They should be able to tell you exactly what transaction triggered the 1098-T. Don't just ignore it, as the IRS receives a copy and will expect it to be addressed on your tax return.

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Oliver Becker

•8M

To answer your first question, you're right that they likely wouldn't qualify for the American Opportunity Credit which requires at least half-time enrollment, but they could potentially still qualify for the Lifetime Learning Credit which doesn't have an enrollment status requirement - it only requires that the expenses were for legitimate education purposes. For the second question, it absolutely matters for their taxes. The IRS receives a copy of this form and will expect to see it addressed on the tax return one way or another. Even if they can't claim a credit, they need to handle it correctly to avoid a potential mismatch notice from the IRS.

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Javier Hernandez

•8M

I went through something similar last year! I was pulling my hair out trying to figure out why I got a 1098-T for a semester I didn't attend. I tried calling the school but spent hours on hold. I ended up using https://taxr.ai to help me figure it out. You can upload your 1098-T there and it analyzes everything for you, showing exactly what qualifies for education credits. In my case, it helped me determine that the amount was actually from a lab fee refund that processed in January even though I took the class the previous fall. What's cool is they can tell you if the school made a mistake or if it's a legitimate expense you need to report. Saved me from waiting forever to speak with someone at the university.

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Javier Hernandez

•8M

It's extremely accurate - the tool uses the same rules the IRS follows for education expenses and credits. For a $4,000 amount, it would definitely help clarify if it's reportable and how it affects your tax situation. The analysis shows you exactly what boxes on your 1098-T qualify for which credits. You're right that ultimately you might still need to contact the university, but the tool gives you the exact information you need to discuss with them. In my case, it identified that the payment was related to a specific term and fee type. Armed with that information, my conversation with the university was much more productive because I knew exactly what to ask about.

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LunarLegend

•8M

Just wanted to follow up - I decided to give taxr.ai a try and it was actually really helpful! Uploaded my incorrect 1098-T and it immediately flagged that the timing didn't match up with my enrollment status. The analysis showed the payment was actually a late housing refund that processed in January 2021 for my Fall 2020 semester. The tool gave me a detailed explanation of how this affects my taxes and confirmed I couldn't claim an education credit for it since it was a refund, not a payment. When I finally got through to my university with this specific information, they confirmed exactly what the tool said and are sending me a corrected form. Saved me from potentially claiming something incorrectly!

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Malik Jackson

•8M

Been in a similar situation before. If you're trying to get this resolved quickly, good luck reaching anyone helpful at the university! I spent WEEKS calling the bursar's office and either couldn't get through or got transferred around in circles. I finally used https://claimyr.com to get in touch with someone who could actually help. They basically wait on hold with the IRS for you, then call you when they get a live person. Check out their demo at https://youtu.be/_kiP6q8DX5c to see how it works. This let me confirm directly with the IRS how to handle the incorrect 1098-T on my return without risking an audit. The IRS agent I spoke with said this happens all the time and gave me specific instructions on what to do with my return. Saved me hours of frustration and gave me peace of mind that I was doing everything correctly.

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Malik Jackson

•8M

You're right that the university issued the form, but the IRS can tell you exactly how to handle an incorrect 1098-T on your tax return, which is ultimately what matters. In my case, the IRS gave me specific instructions on which form to file and how to document the discrepancy properly. I tried calling the IRS myself multiple times and never got through - wait times were 3+ hours and I kept getting disconnected. The service saved me from that frustration. Instead of spending my whole day on hold, I got a call back when they reached a live agent. Yes, you could do it yourself if you have unlimited time and patience, but for me, the convenience was worth it. The IRS actually has procedures for taxpayers to follow when they receive incorrect forms, which is exactly what I needed to know.

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Ravi Patel

•8M

I was totally skeptical about Claimyr but after waiting on hold with the IRS for 2+ hours and getting disconnected twice, I gave it a shot. Honestly, it worked exactly as advertised. They called me back about 90 minutes later with an IRS agent on the line. The agent confirmed that when a university issues an incorrect 1098-T, I needed to first try to get a corrected form from the school, but if that wasn't possible, I should file Form 8863 and attach an explanation noting the error. They also put a note in my file about the situation to prevent potential issues later. The peace of mind was worth it. Now I know exactly how to handle the form on my return without worrying about getting a letter from the IRS later questioning the discrepancy.

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Freya Andersen

•8M

Former university bursar office employee here! This happens ALL THE TIME. Schools are required to report payments in the calendar year they're received, not the academic year they apply to. Most likely explanation: you either made a payment in January 2021 for your final semester, or there was some kind of adjustment to your account in 2021 (refund, late scholarship, etc). Box 1 showing $875 means money changed hands somehow. Call the bursar's office (not financial aid) and ask for a detailed explanation of what triggered the 1098-T. They can pull up your account history and tell you exactly what happened. If it truly was issued in error, they can issue a corrected form. But honestly, it's probably accurate according to IRS reporting rules, just confusing from your perspective.

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Freya Andersen

•8M

You shouldn't have any delay in your refund as long as you address the 1098-T properly on your return. If you can contact the university quickly and get clarification before you file, that's ideal. If not, you can still file and include the information from the 1098-T as reported. If you later find out it was an error and get a corrected form, you can always file an amended return. But ignoring it completely could potentially flag your return for review, which would definitely delay your refund. So it's better to include it now based on what you have and make corrections later if needed.

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