Posted Date: August 6, 2018

Author:  Federal Student Aid

Subject: Title IV Eligible Foreign Schools and the American Opportunity Tax Credit

Background
Under 34 C.F.R. § 668.42, eligible educational institutions, including foreign educational institutions, must publish and make available to current and prospective students information on financial assistance. For foreign educational institutions, the information to be provided must include whether or not the institution will obtain the Employer Identification Number (EIN) and complete the Forms 1098-T that are necessary for its U.S. students (or parents of dependent students) to claim an education tax credit.

Foreign Schools and the American Opportunity Tax Credit
U.S. federal tax laws require each postsecondary educational institution that is an eligible educational institution  to file Form 1098-T reporting payments of qualified tuition and related expenses received from, or on behalf of, the student and furnish a copy to the student. In addition, each postsecondary educational institution must include its EIN on Form 1098-T. 26 U.S.C. § 6050S.

While foreign educational institutions are not required as a matter of Title IV eligibility to obtain an EIN and complete Form 1098-T for U.S. students they enroll, it is a financial benefit to the student for the institution to do so and may provide the student with additional funds to pay for continued enrollment.

The American Opportunity Tax Credit
The American Opportunity Tax Credit is a U.S. federal income tax credit for qualified education expenses paid for an eligible student for the first four years of higher education. 

  • Qualified education expenses are amounts paid for tuition, fees and other related expenses for an eligible student. Qualified education expenses may include expenses paid with proceeds from loans.
  • Eligible student is one who, among other things, is pursuing a degree or other recognized postsecondary education credential and who is enrolled at least half-time at an eligible educational institution.
  • Eligible educational institution includes any postsecondary educational institution (including foreign educational institutions) eligible to participate in FSA programs.

U.S. taxpayers may claim the AOTC on their U.S. federal income tax return for qualified education expenses paid to an eligible educational institution if certain requirements are met. Among other things, U.S. federal tax laws require the following to be eligible for the AOTC:

  • Beginning in 2016, a taxpayer is not eligible for the AOTC unless the tax return claiming the credit includes the EIN issued by the U.S. Internal Revenue Service (IRS) for the student’s educational institution. 26 U.S.C. § 25A(g)(1)(B)(iii).
  • Also beginning in 2016, a taxpayer is generally not eligible to claim the AOTC unless the student receives an IRS Tuition Statement (Form 1098-T) from the student’s educational institution. 26 U.S.C. § 25A(g)(8).

How Can Title IV Eligible Foreign Schools Obtain a U.S. Employer Identification Number
Foreign educational institutions that do not have an EIN issued by the IRS may request an EIN by completing IRS Form SS-4 and faxing Form SS-4 to +1 (304) 707-9471 or mailing Form SS-4 to the following IRS address:

Internal Revenue Service
Attn: EIN International Operation
Cincinnati, OH 45999

Foreign educational institutions may also call +1 (267) 941-1099, 6:00 a.m. to 11:00 p.m. (Eastern Time), Monday through Friday, to obtain an EIN. The person making the call must be authorized to receive the EIN and answer questions concerning Form SS-4. The authorized person does not need to have a U.S. taxpayer identification number. It will be helpful to complete Form SS-4 before calling the IRS. An IRS representative will use the information from Form SS-4 to establish the account and assign an EIN. The IRS can assign an EIN in five to ten minutes over the phone. It may take approximately one week to obtain an EIN if Form SS-4 is faxed to the IRS and may take approximately one month to obtain an EIN if Form SS-4 is mailed to the IRS. Foreign educational institutions may not apply for an EIN online.

   

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