Is a 1098-T Required When an Incarcerated Student's Expenses Are Paid Entirely With the Pell Grant?

Whether a 1098-T must be provided is a question for the IRS, a tax expert, or the school's business office. That having been said, it is NASFAA's limited understanding that a 1098-T is not required when the Federal Pell Grant pays all of the student's qualified tuition and related expenses (QTRE). There is no specific exception for students who are incarcerated regarding the creation and distribution of the 1098-T; however, it appears that some schools do not automatically send the 1098-T to students whose eligible expenses are completely covered by Pell. We recommend contacting the IRS, a tax expert, or the National Association of College and University Business Officers (NACUBO) for confirmation of this guidance. We also recommend discussing any college-specific policies with the business office or the school's legal counsel.