I recently read an article on the website about prepaying for tuition. Here is what I read:
"Colleges will send a Form 1098-T noting the amount of 529 plan payments received, and the amount billed for tuition. If the student is prepaying tuition, the amount billed should reflect the total amount of tuition they are paying upfront."
I work for a technical college and sometimes we have students pay for their entire program in one year and then not have charges until the following year. I understand that the IRS requires us to report payments for qualified tuition and fees in the same calendar year. Schools are allowed to look back for charges, but not look back for payments. Students will get a 1098-T for 2020 for payments made in 2020 up to the total qualified tuition and fees in 2020 and looking back at any qualified tuition and fees from 2002 and forward. However, if the student prepays in 2019, but doesn't have any charges until 2020, they will not get a 1098-T for 2019 or 2020, unless they make more payments in 2020.
I'm curious as to where the author got her information from regarding colleges issuing 1098-T's and showing future billed tuition amounts. We have not been reporting this on our 1098-Ts for students who prepay and I'd like to know the site where the author received her information.
Thanks!
