1098-T Reporting: Reaping the Benefits

Derrick Shy, Senior Account ExecutiveCampus Payment Solutions, Sallie Mae

Randy Schenewerk, Associate ControllerColumbia College

The Form…What is Form 1098-T?

• IRS Form 1098-T summarizes tuition-related, personal and miscellaneous financial information for each student enrolled at a higher education institution

• The Taxpayer Relief Act of 1997 mandates that all schools mail IRS Form 1098-T to their enrolled students (at least they did…more on this later)

• “Informational only” form for the student/taxpayer– Serves as alert to student of possible tax credit eligibility– Contains pertinent TIN, enrollment and academic status, etc.– Additional information required of taxpayer claiming credit(s), which are

optional credits

1098-T Template Screenshot

The Example School…• Columbia College ~ Columbia, MO

– Datatel School

– Traditional Day Campus

– Evening, Grad and Online (and the funding and reporting challenges that come with…)

– Issue over 25,000 forms annually, and growing

The Data…• “Home” of source data varies by school/ERP– What to include:• Tuition, Fees – Box 1 vs. Box 2• Enrollment Status• Registration for subsequent academic year• Scholarships/Grants

– IRS Changes and their impact– ERP Changes and their impact– TEST, TEST, TEST

The Costs…

• Forms• Postage (initial mailing, address

corrections/returns, re-issue requests• Processing (internal and external)• Oops! (Now the forms are REALLY

expensive!)

The Challenges…

• Many forms = Many touches• Storage, before and after January 31st• Many undeliverable• Many programs/student types• Never an issue, Always the fear• Nastygrams

Saving Grace…

• New Electronic Reporting Solutions

• Still have paper, but A LOT LESS!

• No Re-issues!

Updates and Changes

• Truncating Identifying Numbers: IRS pilot program for truncating student SS numbers (paper only) has been extended through tax years 2011 and 2012; full SSN must be displayed on electronic versions however

• Global Consent Forms: If your institution captures a “global” consent form from students for campus business functions (billing, etc.), 1098-T forms can be included

Industry Trends & Impacts

Shifting of student needs and expectations:

• Student populations are increasing

• Staff reductions due to budget cuts

• Stricter compliance requirements

• Higher security risks

• Emphasis on “going green”

1098-T Processing Service – To Outsource or Not?

Benefits to students:

• Provide access to view and print forms online

• Store forms for the time students are in school for easy

access and printing anytime

• Quickly resolve questions through online or phone support

• Notify of 1098-T availability via custom messages and

email alerts

1098-T Processing Service – To Outsource or Not?

Benefits to schools:

• Saves time, money and resources

• Helps ensure the confidentiality and integrity of student data

• Reduces inbound calls to the office for information needs

• Eliminates need to interface with the IRS—service provider should

report to the IRS, as required, on the school’s behalf

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1098-T Processing Service – To Outsource or Not?

Benefits to Schools (Cont):

• Once the required file is sent, the following services can be provided:

• Print and mail 1098-T Tax Forms

• Provide a CD of printed 1098-T Tax forms to the client

• Present 1098-T Tax Forms online to students

• Present 1098-T Tax Forms via reporting tool for administrative staff

• Manage Electronic Consent Process

• If outsourcing, your provider should handle the online consent process on your behalf

1098-T Processing Service – To Outsource or Not?

Benefits to Schools (Cont):

• Sallie Mae advises clients that students have until January 10th to opt in to the electronic version but this may vary depending on your provider

1098-T Application within Full Service Platform

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Questions ?