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HEERF Funds & 1098Ts

Did You Know FAME received guidance from the website clarifying that HEERF grant funds, including emergency FSEOG funds, are not included in the student’s 2020 gross income or reported anywhere on the 1098T form?

FAME has been trying to get clarification on the 1098Ts for several months.  The following Q & A was posted December 15, 2020, on the website.

Q3: Do higher education institutions have any information reporting requirements under section 6050S for emergency financial aid grants awarded to students under section 3504, 18004, or 18008 of the CARES Act? (added December 14, 2020)

A3: No. The emergency financial aid grants are qualified disaster relief payments, as described in A1 above, and are not included in students’ gross income. As noted in A2 above, students may not claim deductions or credits for these amounts. The reporting of these grants to the IRS on Forms 1098-T could result in the issuance of underreporter notices (Letters CP2000) to students and furnishing such Forms 1098-T to students could cause confusion. Thus, the IRS will not require that these grants be reported pursuant to section 6050S of the Internal Revenue Code on Form 1098-T.

Wishing Happy and Healthy Holidays to all of our FAME clients.

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