The Internal Revenue Service (IRS) on Wednesday granted colleges and universities a temporary reprieve on new Form 1098-T reporting requirements.
Under the Protecting Americans from Tax Hikes (PATH) Act of 2015, enacted last year, institutions are now required to report the aggregate amount of payments received (Box 1), as opposed to the aggregate amount billed for qualified tuition and related expenses (Box 2).
The change, and its rushed implementation, drew concern from the higher education community. AACRAO joined a broad coalition of associations to urge the agency to delay application and give institutions more time to modify software systems to meet the new reporting requirement.
In an announcement published on Wednesday, the IRS stated that institutions would not be penalized for reporting Box 2 information instead of the newly-required Box 1 payments received for the 2016 tax year. Additionally, the agency signaled that they intend to release some additional guidance on institutional reporting requirements that could potentially address other transitional concerns.
Related Links
Internal Revenue Service Announcement 2016-17
https://www.irs.gov/pub/irs-drop/a-16-17.pdf