The National Association of Student Financial Aid Administrations (NASFAA) has released guidance related to the reporting of the Higher Education Emergency Relief Funds (HEERF) as part of the Coronavirus Aid, Relief and Economic Security Act (CARES Act). Based upon this guidance, payments under HEERF should be reported on the 1098-T in Box 5.
See more information and background here:
Question: Are Emergency FSEOG and Higher Education Emergency Relief Fund Student Grants Reported On IRS Form 1098-T?
Answer: Yes. Higher Education Emergency Relief Fund grants to students and Emergency Federal Supplemental Educational Opportunity Grant (FSEOG) awards are included on IRS Form 1098-T.
According to the National Association of College and University Business Officers (NACUBO), the 26 CFR 1.6050S-1 reporting requirements for the 1098-T are still in effect and require all schools to report all “grant aid processed and administered by the institution.” HEERF grants to students and Emergency FSEOG amounts should appear in Box 5.
Further, the IRS FAQs: Higher Education Emergency Relief Fund and Emergency Financial Aid Grants under the CARES Act make it clear that students cannot claim any education credits or deductions, so the emergency grant amounts should not appear in Box 1 of the 1098-T.
Note: The IRS collects the 1098-T, not to determine whether the student has taxable scholarships or grants, but to provide documentation allowing the IRS to ensure that students claiming the American Opportunity Credit and Lifetime Learning Credit have not paid all of their tuition and fees costs with grants and scholarships.
Any additional questions on this topic go directly to the IRS or the school’s business office, as tax rules and regulations are not within NASFAA’s area of Title IV expertise.
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