Middlebury

 

Tax Forms Provided by the College and the Institute

What do they show, what are they used for, where you can get them:

Form W-2
Form 1042-S
Form 1099MISC
Form 8843
Form 1098-T

Form W-2

Form W-2 is used to report wage income received in a given calendar year. It is sent out by the College by January 31 of the following year to all current and former employees. It is available online (see sidebar) and is mailed via postal mail to those who did not consent to electronic delivery. A copy of Form W-2 needs to be attached to any tax return filed on paper. W-2 information is also submitted to the Internal Revenue Service electronically.

Receiving Form W-2 generally means that a U.S. Federal Income tax return and depending on the state where the work was performed, a state income tax return needs to be filed. There are exemptions from filing a tax return. For more information on how to file a tax return, see here.

The following income types are generally reported by the College / Institute (for more information on the types of payments see the Payment section of this website):

  • Box 1: Wages, tips, taxable fringe benefits, unsubstantiated business expense reimbursements, group-term life insurance over $50,000, non-qualified moving expense reimbursements, prizes and awards paid to employees, etc., which are subject to federal income tax
  • Box 2: Federal income tax withheld
  • Box 3 and 5: Wages, tips (only for box 5), taxable fringe benefits, unsubstantiated business expense reimbursements, group-term life insurance over $50,000, non-qualified moving expense reimbursements, prizes and awards paid to employees, etc., which are subject to Social Security and Medicare tax.
  • Box 4: Social security tax withheld
  • Box 6: Medicare tax withheld
  • Box 7: Social security tips
  • Box 10: Dependent care benefits (maximum $5,000)
  • Box 12 Code C: Taxable cost of coverage of group-term life insurance over $50,000
  • Box 12 Code E: Elective deferrals under a section 403(b) salary reduction agreement
  • Box 12 Code P: Qualified moving expense reimbursements paid directly to employee
  • Box 14 RECR: Taxable cost of coverage of ski pass or golf membership (taxable fringe benefit included in boxes 1, 3, and 5)
  • Box 14 RET: Required employee contributions to pension plan
  • Box 16: Wages, tips, taxable fringe benefits, unsubstantiated business expense reimbursements, non-qualified moving expense reimbursements, group-term life insurance over $50,000, prizes and awards paid to employees, etc., which are subject to State income tax
  • Note: Box 3 + Box 7 = no more a maximum amount, set every year by the Social Security Administration.

 

Form 1042-S

Form 1042-S is used to report all types of income for non-resident aliens and for resident aliens with treaty benefits.

It is sent out by the College around Mid February. The last date the form can be sent out to you and the IRS is March 15.  The College first uploads Form 1042-S electronically onto a secure website called Foreign National Information System and then mails Form 1042-S via postal mail to those individuals who did not give consent for electronic posting. By March 31, the 1042-S information is also submitted to the Internal Revenue Service electronically.

If you receive Form 1042-S, you have to file a U.S. Federal Income tax return and possibly also a State income tax return. For more information on how to file a tax return, see here. Generally, copy B needs to be attached to your federal tax return, copy C to your state tax return and copy D is your copy to keep for your records.

The following income types are generally reported by the College / Institute (for more information on the types of payments see the Payment section of this website):

For Non-Resident Aliens:

  1. Non-qualified scholarship using income code 15 with exemption code 04 when treaty benefits apply, with exemption code 00 when no treaty benefits apply. If no treaty benefits, the tax rate will be 14% or 30%;
  2. Honorarium / Self-Employment Income using income code 15 with exemption code 04 when treaty benefits apply, with exemption code 00 when no treaty benefits apply. If no treaty benefits, the tax rate will be 30%;
  3. Wage income with treaty benefits using income code 17, 18, or 19 and exemption code 04;
  4. Performance fees using income code 20 with exemption code 04 when treaty benefits apply, with exemption code 00 when no treaty benefits apply. If no treaty benefits, the tax rate will be 30%;
  5. Prizes using income code 50 with exemption code 04 when treaty benefits apply, with exemption code 00 when no treaty benefits apply. If no treaty benefits, the tax rate will be 30%;
  6. Royalities using income code 12 with exemption code 04 when treaty benefits apply, with exemption code 00 when no treaty benefits apply. If no treaty benefits, the tax rate will be 30%. NOTE: Royalities are being taxed even if the receiver of the royalties never set foot on the U.S. as in this case what matters is not the location of the recipient but the location of the use of the right.

For Resident Aliens for Tax Purposes with Treaty Benefits:

  1. Non-qualified scholarship using income code 15 with exemption code 04 for treaty benefits.
  2. Wage income with treaty benefits using income code 17, 18, or 19 and exemption code 04.

Form 1099MISC

  • Rent (Box 1)
  • Royalty payments (Box 2)
  • Prizes and awards that are not for services, such as graduation prizes, winnings on Vegas nights, or winnings on TV or radio shows (Box 3)
  • Payments for services performed for a trade or business by people not treated as its employees, e.g., fees to subcontractors or directors (and reimbursements if no original receipts were attached with the payment request) (Box 7)
  • If an employee dies during the year, the accrued wages, vacation pay, and other compensation paid after the date of death (Box 7)
  • It also reports any federal income tax withheld (Box 4) if any. For example, persons who have not furnished their TIN are subject to withholding at a 28% rate on payments required to be reported in boxes 1, 2 (net of severance taxes), 3, 5 (to the extent paid in cash), 6, 7 (except fish purchases for cash), 8, 10, and 14.

Cumulative payments of $10 and more in royalties or $600 and more for all other types of income for the calendar year are reported on Form 1099MISC. In addition, any federal income tax withheld is reported.

All income even if lower than $600 and thus not reported on Form 1099MISC needs to be reported on your federal and state income tax return.

Form 1099MISC is not sent to tax-exempt organizations, the United States, a state, the District of Columbia, a U.S. possession, or a foreign government. The same is true for most payments to corporations.

Prizes and awards given to employees based on their performance at work are reported on Form W-2.

Form 8843 

Form 8843 needs to be submitted to the Internal Revenue Service by every body who has been in the U.S. on a J, F, M, or Q visa in the past year. This includes dependents. 
Form 8843 is submitted with a tax return (Form 1040NR or 1040NR-EZ) unsigned.
If the person does not submit a tax return or dependents of a primary visa holder have to submit Form 8843, the form needs to be signed by the individual visa holders and mailed individually directly to
Department of the Treasury
Internal Revenue Service Center
Austin, TX 73301-0215
by June 15.

If the child cannot sign his or her return, a parent or guardian can sign the child's name in the space provided at the bottom of the tax return. Then, he or she should add: “By (signature), parent (or guardian) for minor child.”

Form 1042-S is used to report income for non-resident aliens and for resident aliens with treaty benefits.

It is sent out by the College around Mid February. The last date the form can be sent out to you and the IRS is March 15.  The College first uploads Form 1042-S electronically onto a secure website called Foreign National Information System and then mails Form 1042-S via postal mail to those individuals who did not give consent for electronic posting. The College also submites Forms 1042-S to the IRS electronically through FIRE.

If you receive

1098-T

1098T Letter to Students

 

Dear Student:

In accordance with IRS guidelines, Middlebury College is providing the form 1098-T to you and to the Internal Revenue Service. This form is provided to you to alert you to the possibility that you or your parent/guardian may be eligible for federal income tax credits that could reduce your 2008 federal income tax liability.

Here are some frequently asked questions with answers to help you understand this form:

Why is there not an amount in Box 1?
The IRS gives the option of either reporting amounts billed or total payments received. Middlebury College has elected to comply with the option of reporting total amounts billed by the college for qualified tuition and related expenses during the calendar year. This amount is reported in Box 2.

What is included in the amount in Box 2?
Since Middlebury College has a comprehensive fee for Undergraduate Studies, the internal determination of tuition plus student activity fee was for each of the semesters billed in calendar year 2008 (fall of 2008 and spring of 2009) $21,355.36. If applicable, the physical education fee for Fall of 2008 and Spring of 2009 is added to those amounts. For the Language Schools and the Breadloaf Schools of English, the amount represents what was billed for tuition. Note: Do not submit Form 1098T with your tax return it is an information return only. It shows amounts BILLED, which may not equal the amount you PAID this tax year. Only report the amounts actually PAID and RECEIVED on your tax return. Keep a copy of your bank statement / Pay stubs etc. as proof of payment in case of an IRS audit.

What is included in Box 5?
All financial aid administered by Student Financial Services, aid received from outside sources such as employer tuition benefits and state grants, and other monies received from the College such as summer internship funding, summer travel and Dean’s Grants (check here for more description of student payments). Prizes are reported on a separate form called 1099MISC. Financial Aid is reported by the date it was POSTED to the account, so if your aid for the Spring 2009 was posted in January 2009 instead of Fall 2008 like most aid decisions, it will not show up on the 2008 1098-T.

What expenses are eligible for those federal income tax credits (the Hope or Lifetime Learning Credit)?
Under Section 25A of the Internal Revenue Code and the regulations there under, the taxpayer may claim an education tax credit only with respect to qualified tuition and expenses actually paid during the calendar year. Therefore you may not be able to claim an education tax credit with respect to the entire amount of amounts billed, if you did not pay the entire amount that calendar year. In addition, aid reported in Box 5 and other similar amounts that were not administered and processed by the College may reduce the amount of any allowable education tax credit for the calendar year.

The amount of any reimbursements or refunds of qualified tuition and related expenses reported by an insurer may reduce the amount of an allowable education tax credit for a taxable year (and may result in an increase in tax liability for the year of the refund).

Why is there no financial information on the form?
If the student graduated in the spring of 2008, the financial data such as qualified tuition charged and scholarships were posted to the student’s account in the fall of 2007. These amounts would therefore have been reported on the 1098-T issued to you in 2007.

Where can I get more information?
Middlebury College can only answer questions related to how the Form 1098-T was prepared. Please refer to the IRS Forms and Publications noted below, for explanations relating to the eligibility requirements for, and calculation of any allowable education tax credit. You may also want to consult with your individual tax preparer.

See IRS Publication 970, this IRS Bulletin 2006-36 page 363ff. and IRS Form 8863 for more information. You may also call the IRS at 800-TAX FORM.

Is the Form 1098T information available online?
Yes, log into Banner Web services, go to the Student Accounts and Financial Aid tab and then to the Accounts Receivable Menu.

Why Did You Receive Form 1098-T

In 1997 the federal government required educational institutions to file Form 1098-T to assist taxpayers (and the IRS) to determine the amount of qualified tuition and related expenses for which an education tax credit is allowable. This information is important for three reasons:

  1. Financial Aid greater than tuition paid or aid specifically for travel, living expenses, visa fees etc., is scholarship income and as such reportable on your tax return as taxable income (check table 1.1 in Publication 970 to determine whether your financial aid is taxable);
  2. You might be able to claim an education tax credit, the Hope Scholarship Credit or the Lifetime Learning Credit, (check table 2.1 in Publication 970 for differences between credits) on your tax return;
  3. You might be able to claim a Tuition and Fees Deduction on your tax return.

Here is a summary of tax education benefits, also see below for some more information.

Financial Aid

Generally, a scholarship or fellowship is tax free if:

  1. You are a candidate for a degree at an eligible educational institution, and
  2. You use the scholarship or fellowship to pay qualified education expenses.

For purposes of tax-free scholarships and fellowships, qualified education expenses are tuition and fees required to enroll at or attend an eligible educational institution, and course-related expenses, such as fees, books, supplies, and equipment that are required for the courses at the eligible educational institution. These items must be required of all students in your course of instruction. However, in order for these to be qualified education expenses, the terms of the scholarship or fellowship cannot require that it be used for other purposes, such as room and board, or specify that it cannot be used for tuition or course-related expenses.

Expenses that do not qualify include the cost of room and board, travel, research, clerical help, cash paid out for scholarship prizes or equipment and other expenses that are not required for enrollment in or attendance at an eligible educational institution. This is true even if the fee must be paid to the institution as a condition of enrollment or attendance. Scholarship or fellowship amounts used to pay these costs are taxable.

Hope Credit

Generally, you can claim the Hope credit if all three of the following requirements are met:

  1. You pay qualified education expenses of higher education;
  2. You pay the education expenses for an eligible student;
  3. The eligible student is either yourself, your spouse, or a dependent for whom you claim an exemption on your tax return.

 

For purposes of the Hope credit, qualified education expenses are tuition and certain related expenses required for enrollment or attendance at an eligible educational institution. Student-activity fees and expenses for course-related books, supplies, and equipment are included in qualified education expenses only if the fees and expenses must be paid to the institution as a condition of enrollment or attendance.

American Opportunity Credit

The new credit modifies the existing Hope Credit for tax years 2009, 2010, 2011, and 2012 making the Hope Credit available to a broader range of taxpayers, including many with higher incomes and those who owe no tax. Generally, you can claim the American Opportunity Credit if all three of the following requirements are met:

  1. You pay qualified education expenses of higher education;
  2. You pay the education expenses for an eligible student;
  3. The eligible student is either yourself, your spouse, or a dependent for whom you claim an exemption on your tax return.

 

For purposes of the American Opportunity credit, qualified education expenses are tuition and certain related expenses required for enrollment or attendance at an eligible educational institution including course materials. The term "course materials" means books, supplies and equipment needed for a course of study whether or not the materials are purchased from the educational institution as a condition of enrollment or attendance. See the IRS's Question and Answer section for more information.

Lifetime Learning Credit

Generally, you can claim the lifetime learning credit if all three of the following requirements are met:

  1. You pay qualified education expenses of higher education;
  2. You pay the education expenses for an eligible student;
  3. The eligible student is either yourself, your spouse, or a dependent for whom you claim an exemption on your tax return.

For purposes of the lifetime learning credit, qualified education expenses are tuition and certain related expenses required for enrollment in a course at an eligible educational institution. The course must be either part of a postsecondary degree program or taken by the student to acquire or improve job skills. Student-activity fees and expenses for course-related books, supplies, and equipment are included in qualified education expenses only if the fees and expenses must be paid to the institution as a condition of enrollment or attendance.

Tuition and Fees Deduction

Generally, you can claim the tuition and fees deduction if all three of the following requirements are met:

  1. You pay qualified education expenses of higher education;
  2. You pay the education expenses for an eligible student;
  3. The eligible student is yourself, your spouse, or your dependent for whom you claim an exemption on your tax return.

For purposes of the tuition and fees deduction, qualified education expenses are tuition and certain related expenses required for enrollment or attendance at an eligible educational institution. Student-activity fees and expenses for course-related books, supplies, and equipment are included in qualified education expenses only if the fees and expenses must be paid to the institution as a condition of enrollment or attendance.

Student Loan Interest Deduction

Student loan interest is interest you paid during the year on a qualified student loan. It includes both required and voluntary interest payments.

Answers to Box 2 Tuition Billed

When requiring Form 1098-T the federal government left the educational institution the choice between reporting amounts paid (Box 1 of Form 1098T) and amounts billed (Box 2 of Form 1098T). Middlebury College and the Monterey Institute along with many other institutions have chosen to report amounts billed.

However, both the federal and state tax codes focus on payments (of any kind) being made in the given tax year.

This discrepancy leads often to confusion as the amount in Box 2 is not necessarily what was paid in that tax year to the institution and thus cannot be used for reporting on the individual income tax return.

The federal government is aware of this issue and thus currently does not match Form 1098-T to what is being reported on an individual taxpayers’ tax return. Instead, in case of an audit, the IRS would look at bank statements, canceled checks etc. as support for actual payments made in the tax year.

I am attaching a link to the IRS Notice 2006-72 (go to pdf page 15) which explains the background for Form 1098-T and answers many questions in regards to it.

Answers to Box 5 Scholarships or Grants

529 Payments:

Are not included in Box 5. As you are the beneficiary of this money, the payments from the 529 Plans are considered payment by yourself.

Middlebury Specific Answers

Who Receives Form 1098-T:

If you are a Full-Time Students in for credit classes or a Part-Time Students in for credit classes, you will receive Form 1098-T. For Middlebury College this means all undergraduate students, Language School students and Breadloaf School of English students receive Form 1098-T.

Who does not receive Form 1098-T:

  1. Students in Courses for which no academic credit is offered, even if the student is otherwise enrolled in a degree program;
  2. Nonresident alien students, unless requested by the student;
  3. Students whose qualified tuition and related expenses are entirely waived or paid entirely with scholarships or grants; and
  4. Students for whom the educational institution does 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.

 

If you are in a non-Middlebury study abroad program:

Box 2: If you are in a non-Middlebury program abroad, the only charge that hits your Middlebury student account is the study abroad fee. The other charges would come from the school that you are attending. We cannot put it on our form since we do not bill it. You should get a Form 1098-T from the other school, if it is a U.S. school.
Box 5: Middlebury gives aid for some non-Middlebury programs, especially when we do not have our own program in that country. The student's program has to be approved by our Off-Campus Study office in order to qualify for financial aid from us. That aid is then shown in box 5.

If you start as a Feb:

If you start as a Feb you will not receive a Form 1098-T for the previous calendar year in which your spring tuition was billed and financial aid was applied.

If you were not enrolled in the past calendar year but an adjustment has been made to your account:

Box 4 and 6: If you were not enrolled in the past calendar year but an adjustment has been made to your account from the year prior, you will receive a Form 1098-T with Box 4 or Box 6 filled in.

It is sent out by the College around Mid February. The last date the form can be sent out to you and the IRS is March 15.  The College first uploads Form 1042-S electronically onto a secure website called Foreign National Information System and then mails Form 1042-S via postal mail to those individuals who did not give consent for electronic posting. The College also submites Forms 1042-S to the IRS electronically through FIRE.

If you receive Form 1042-S, you have to file a U.S. Federal Income tax return and possibly also a State income tax return. For more information on how to file a tax return, see here. Generally, copy B needs to be attached to your federal tax return, copy C to your state tax return and copy D is your copy to keep for your records.

The following income types are generally reported by the College / Institute (for more information on the types of payments see the Payment section of this website):

For Non-Resident Aliens:

  1. Non-qualified scholarship using income code 15 with exemption code 04 when treaty benefits apply, with exemption code 00 when no treaty benefits apply. If no treaty benefits, the tax rate will be 14% or 30%;
  2. Honorarium / Self-Employment Income using income code 15 with exemption code 04 when treaty benefits apply, with exemption code 00 when no treaty benefits apply. If no treaty benefits, the tax rate will be 30%;
  3. Wage income with treaty benefits using income code 17, 18, or 19 and exemption code 04;
  4. Performance fees using income code 20 with exemption code 04 when treaty benefits apply, with exemption code 00 when no treaty benefits apply. If no treaty benefits, the tax rate will be 30%;
  5. Prizes using income code 50 with exemption code 04 when treaty benefits apply, with exemption code 00 when no treaty benefits apply. If no treaty benefits, the tax rate will be 30%;
  6. Royalities using income code 12 with exemption code 04 when treaty benefits apply, with exemption code 00 when no treaty benefits apply. If no treaty benefits, the tax rate will be 30%. NOTE: Royalities are being taxed even if the receiver of the royalties never set foot on the U.S. as in this case what matters is not the location of the recipient but the location of the use of the right.

For Resident Aliens for Tax Purposes with Treaty Benefits:

  1. Non-qualified scholarship using income code 15 with exemption code 04 for treaty benefits.
  2. Wage income with treaty benefits using income code 17, 18, or 19 and exemption code 04.

Form 1099MISC

1099MISC reports Miscellaneous Income such as

Form 1042-S

Form 1042-S is used to report income for non-resident aliens and for resident aliens with treaty benefits.

It is sent out by the College around Mid February. The last date the form can be sent out to you and the IRS is March 15.  The College first uploads Form 1042-S electronically onto a secure website called Foreign National Information System and then mails Form 1042-S via postal mail to those individuals who did not give consent for electronic posting. The College also submites Forms 1042-S to the IRS electronically through FIRE.

If you receive Form 1042-S, you have to file a U.S. Federal Income tax return and possibly also a State income tax return. For more information on how to file a tax return, see here. Generally, copy B needs to be attached to your federal tax return, copy C to your state tax return and copy D is your copy to keep for your records.

The following income types are generally reported by the College / Institute (for more information on the types of payments see the Payment section of this website):

For Non-Resident Aliens:

  1. Non-qualified scholarship using income code 15 with exemption code 04 when treaty benefits apply, with exemption code 00 when no treaty benefits apply. If no treaty benefits, the tax rate will be 14% or 30%;
  2. Honorarium / Self-Employment Income using income code 15 with exemption code 04 when treaty benefits apply, with exemption code 00 when no treaty benefits apply. If no treaty benefits, the tax rate will be 30%;
  3. Wage income with treaty benefits using income code 17, 18, or 19 and exemption code 04;
  4. Performance fees using income code 20 with exemption code 04 when treaty benefits apply, with exemption code 00 when no treaty benefits apply. If no treaty benefits, the tax rate will be 30%;
  5. Prizes using income code 50 with exemption code 04 when treaty benefits apply, with exemption code 00 when no treaty benefits apply. If no treaty benefits, the tax rate will be 30%;
  6. Royalities using income code 12 with exemption code 04 when treaty benefits apply, with exemption code 00 when no treaty benefits apply. If no treaty benefits, the tax rate will be 30%. NOTE: Royalities are being taxed even if the receiver of the royalties never set foot on the U.S. as in this case what matters is not the location of the recipient but the location of the use of the right.

For Resident Aliens for Tax Purposes with Treaty Benefits:

  1. Non-qualified scholarship using income code 15 with exemption code 04 for treaty benefits.
  2. Wage income with treaty benefits using income code 17, 18, or 19 and exemption code 04.

Last Updated April 232, 2009