2016 1098T Instructions
1098T – Annual Printing
Diamond SIS will update the 1098T form annually to conform to IRS Regulations. You will not need to purchase special forms or envelopes. Your Diamond SIS allows you to print the form for each student. The form can be tri-folded to fit in a standard window envelope. 1098T forms to students must be postmarked or delivered electronically no later than January 31st and electronic filing to the IRS must be submitted by March 31st of each calendar year. However, we highly recommend you file before that date.
Limited penalty relief. For the 2016 calendar year, Announcement 2016-42, available at https://www.irs.gov/irb/2016-49_IRB/ar10.html, provides that no penalties will be imposed under Section 6721 or 6722 for reporting the aggregate amount billed, instead of the aggregate amount of payments received, for qualified tuition and related expenses on Form 1098-T. Beginning in 2017, only the qualified tuition and related expenses actually paid can be reported on Form 1098-T.
New checkbox. A new checkbox was added to the Student's taxpayer identification number box. This checkbox is for the purpose of certifying under penalty of perjury that you have complied with the standards promulgated by the Secretary for obtaining the student's TIN. See Student's taxpayer identification number and checkbox, in the Specific Instructions for Form 1098-T on page 5.
For the latest information about developments related to Form 1098-T and the instructions, such as legislation enacted after they were published, go to www.irs.gov/form1098t.
For more information about reporting on Form 1098-T, see Regulations section 1.6050S-1. Also see Notice 2006-72, 2006-36 I.R.B. 363, available at www.irs.gov/irb/2006-36_IRB/ar10.html for guidance in a question and answer format on the information reporting requirements for Form 1098-T.
IRS Fire System Account Information
You must have a Transmitter Control Code (TCC) before you can transmit an electronic information return file. If you have any questions, please contact the Internal Revenue Service at 1-866-455-7438. We recommend you zip your submission file for faster transmission. We also recommend that you verify with the IRS that your submittal file has been received, processed and accepted. https://fire.irs.gov
Specific Instructions for Form 1098-T
File Form 1098-T, Tuition Statement, if you are an eligible educational institution. You must file for each student you enroll and for whom a reportable transaction is made. An eligible educational institution is a college, university, vocational school, or other postsecondary educational institution that is described in section 481 of the Higher Education Act of 1965 as in effect on August 5, 1997, and that is eligible to participate in the Department of Education's student aid programs. This includes most accredited public, nonprofit, and private postsecondary institutions.
You do not have to file Form 1098-T or furnish a statement for:
- Courses for which no academic credit is offered, even if the student is otherwise enrolled in a degree program;
- Nonresident alien students, unless requested by the student;
- Students whose qualified tuition and related expenses are entirely waived or paid entirely with scholarships; and
- Students for whom you do not maintain a separate financial account and whose qualified tuition and related expenses are covered by a formal billing arrangement between an institution and the student's employer or a governmental entity, such as the Department of Veterans Affairs or the Department of Defense.
Qualified Tuition and Related Expenses
Qualified tuition and related expenses are tuition, fees, and course materials required for a student to be enrolled at or attend an eligible educational institution. The following are not qualified tuition and related expenses.
- Amounts paid for any course or other education involving sports, games, or hobbies, unless the course or other education is part of the student's degree program or is taken to acquire or improve job skills.
- Charges and fees for room, board, insurance, medical expenses (including student health fees), transportation, and similar personal, living, or family expenses.
Statements to Students
If you are required to file Form 1098-T, you must furnish a statement or acceptable substitute, on paper or electronically, to the student.
Preparing to Run 1098T Forms
Prior to running the forms, you must first set the parameters for the students who should receive a 1098T according to the IRS Regulations.
Student Status Master
Registrar > Registrar Master > Student Status Master
You will need to determine which students should receive a 1098T form. Diamond SIS looks for payments received on behalf of a student in the calendar year for the ledger codes the school has selected to include for 1098T purposes. You need to determine which student statuses would need to be included for tax purposes according to the IRS Regulations.
In the 1098T column, enter a ‘Y’ in the fields that apply.
How to Manually Adjust for Included/Excluded Students
Registrar > Student Master > Other Tab
From within the Student Master you can manually choose which student to include or exclude prior to generating your 1098T forms. The options available are:
Registrar > Registrar Master > Program Master > General Tab
In the Program Master, make sure a Y is entered in the 1098T field for all programs that meet the 1098T regulations for reporting purposes. Only students in programs with a ‘Y’ in this field will be eligible to receive a 1098T.
Prior Year Adjustments
Beginning in 2008, Prior Year Adjustments will be identified in either the Payment Batch or Miscellaneous Batch when the transactions are posted by changing the ‘N’ to ‘Y’ in the Prior Year Adjustment field. This is located on the Receive Payment screen for Payment Batches and in the last column on the right in the Miscellaneous Batch screen.
Note: A Prior Year Adjustment will appear on the 1098T as a positive amount, even though it will show on the Student’s Ledger as a negative. This is because the IRS will not accept negative amounts.
New for 2016
Checkbox for Student’s Taxpayer Identification Number
A check in this box indicates that you certify under penalty of perjury that you have in good faith complied with the standards in regulation section 1.6050S-1 governing the time and manner of soliciting the taxpayer identification number of the student. To identify students who meet this criteria the school must flag the individual students. To do this go to Registrar > Student Report Selection > Select the Students > Move to the Right > Select > Misc > SSN Verification Change. This information is retained within Diamond on the Registrar > Student Master > Other tab. The students flagged with Yes will have an X in the Student’s taxpayer identification number box on the 1098T form.
Box 7 - Checkbox for Amounts for an Academic Period Beginning in January through March of 2017
A check in this box indicates whether the amount in Box 1 includes amounts for an academic period beginning January-March of the following calendar year. To identify students who meet this criteria the school must flag the individual students. To do this go to Accounting > Accounting Report Selection > Select the Students > Move to the Right > Make Selection > Select Flag Selected Students > Click Go. The students you have flagged will have an X in Box 7 on the 1098T form.
Running the 1098T Forms
Reports > Accounting > 1098T > 1098T 2016
If the year does not appear you may not have been given permission to this menu item. To grant permission to the menu item navigate to Admin Tools > Diamond SIS User Management > Select the User’s Profile > Menu Setup Tab > Reports Sub Menu > Check the Box for 1098T 2016.
The 1098-T screen for the year selected will appear. Prior to running the forms, you must complete the required information.
Diamond SIS will release the functionalities to combine multiple campus data and generate final IRS submission files by the end of February 2017.
Transmitter Control Code: Comes from the IRS and is required to file electronically.
Federal ID No.: Institution's Federal Taxpayer ID Number.
Contact Name: School's Official Contact Name. This is the person the school has designated to answer all questions concerning the 1098T reporting and filing.
Contact Phone: Phone number for the contact person at your institution.
Contact Email: Email address for the contact person at your institution.
Select Ledger Codes: Clicking this button will bring up the 1098T Ledger Codes Master to allow you to review, add or remove the ledger codes to be used for the 1098T for the year selected. Identify the ledger codes that are Grants and Scholarships from the drop down.
View Related Student Ledgers: Allows you to view and print the student ledger for all students a 1098T Form has been generated for. The ledger contains all transactions for the selected year with the 1098T transactions identified. Not all students who had transactions during the selected year will have transactions that qualify for 1098T reporting. You may have more student ledgers than actual 1098T forms. We recommend that you review these ledgers as a way to ensure all students who should receive a 1098T have met the requirements.
Print Student 1098-T Forms: When this button is chosen the program will create a 1098T report to the screen which is used to print the actual 1098T forms. You will need to print one form for the student and one for the school if the school wants a hard copy. You can also export the entire file and save it for future reference as needed. To export click on the Export button, enter where to Save In, select Save as Type: Snapshot Format (*.snp), click Export.
Create Electronic File: Creates the file you will need to send to the IRS. This file will be placed where ever the school has designated and will have the 1098T name attached to the file. To verify or change the path go to Admin Tools > Master > School Master > User Defined Fields Tab > Accounting: 1098T. Any changes to the file path must be done BEFORE you run the 1098T's.
Export Data to Combine Multiple Files: Used for schools that have more than one location and must combine the files from multiple schools into one file to transmit to the IRS. Each location will need to run this and send the file to the location who will be combining the files.
Export Data to Review: Produce an Excel spreadsheet with the students receiving 1098T’s. You
can then review this to locate inaccurate data. The data will then need to be corrected in the Student Master. If corrections have been made to student data you will need to repeat the steps above to generate accurate 1098T forms for all students.
1098-T Guidelines: Will redirect you to a copy of the 1098T Instructions.
Combining Multiple Files – (for schools with multiple locations)
Schools with more than one location that must combine all locations into one electronic file to be submitted to the IRS do the following:
- After you have finalized and printed the 1098T’s for the students
- Click the Export Data to Combine Multiple Files. This will create an Excel form that will be saved to the directory you selected. This will need to be done for each location.
- Send the Excel file to the location responsible for submitting to the IRS.
- Enter the organization’s Transmitter Code, Federal ID No. School Contact Name, Contact’s Phone number and Contact’s Email.
- Enter the organization’s name. This will be the official name that belongs to the Federal ID number. Enter the Address, City, State, Zip and phone number.
- If the reporting method has changed from last year check the box. If not leave it blank.
- Click the Import Data. Then go to where you put the file(s) from each location. This will be an Excel file with the school name-1098T.xls. Click on the file. You will receive an Import Complete, click OK. Then repeat until you have imported all of the school files you need.
- Then click on Create Electronic File. This will create the file you will send to the IRS. It will be saved where you have told it to and will be named: 1098T-2016—ElectronicFile.txt.
Troubleshooting and Verifying Data
If you receive a data is not valid error when you Print Student 1098-T Forms it means your student data is not complete. The following are required by the IRS:
- First Name
- Last Name
- State – Must be two letter format only
- Zip Code
- Full/Part Time (Student Master, History Tab), if this is left blank it will automatically be considered Full Time for the 1098T and will not cause a data not valid error.
- Valid Social Security Number - Diamond SIS cannot verify this for you, however the IRS could penalize the school if invalid SSN’s are submitted.
1098T’s Not Printing for All Students
Make sure the following has been completed:
- Student Status Master – there is a ‘Y’ in the 1098T column for the student statuses you want receive 1098T forms.
- Program Master – Ensure there is a ‘Y’ in the 1098T field for each qualified program.
- 1098T Ledger Codes – Ensure the ledger codes you want to include are on the right and the ledger codes that are Grants or Scholarships have be identified.
Student’s First Term date must be no later than 12/31 of the reporting year and the LDA, Grad Date or Drop Date must be within the reporting year. Even if the student has 1098T transactions they will not receive a 1098T unless all fields are complete and all applicable enrollment ending dates are present in Diamond SIS.
Please be advised that it is ultimately the institution’s responsibility to ensure accurate data is reported for 1098T reporting purposes and by the deadline established by the Internal Revenue Service.
For questions regarding this functionality within Diamond SIS please direct all inquiries to Diamond SIS Support by navigating to https://support.diamondsis.com and submitting a ticket.