What is the purpose of Form 1098-T?

Form 1098-T serves the primary purpose of providing a tuition statement from eligible educational institutions to students. This form includes crucial information such as the amount of qualified tuition and related expenses that the student was billed during the tax year. Educational institutions are required to furnish this form to students and the IRS to assist in tracking qualified education expenses, which can be useful for tax benefits such as education credits or deductions.

While it contributes to the reporting of qualified education expenses and can aid in claiming various educational tax benefits, its essential function is to act as a formal record of what the student incurred in tuition fees, thus making it easier to substantiate claims for education-related tax benefits when filing a tax return. This context is what establishes Form 1098-T as a vital document for students pursuing various educational tax credits and deductions, even though the form itself does not serve as the direct application for such credits.