Question

1098-T with empty Box1 but filled Box5

Forum|Forum|6 years ago
April 12, 2020
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I am including my daughter’s college tuition for the deduction. Because her tuition and related expense for Spring 2019 the semester was posted on her college system on 12/1/2018, it was included in 1098-T 2018 form. However, her scholarship was posted on the system on 1/22/2019, so it was included in the 1098-T 2019 form. And she graduated in spring 2019, so there was no other tuition and the Box1 of 1098-T 2019 was empty, while Box5 was filled. I did pay for the rest of her spring semester’s tuition in Jan 2019.

So how do I enter information for Box1 of 1098-T 2019 on my Tax file? If I leave Box1 (tuition & expense) empty as it is on the 1098-T and only enter Box5 (scholarship) of 1098-T, then I would not qualify for any deduction. But I did pay for her rest of tuition in Jan 2019.

Hal_Al

Employee

The 1098-T is only any informational document. The numbers on it are not required to be entered onto your tax return. However receipt of a 1098-T frequently means you are either eligible for a tuition credit or deduction or possibly your student has taxable scholarship income.

If you claim the tuition credit, you do need to report that you got one or that you qualify for an exception (the TurboTax interview will handle this)

You claim the tuition credit, or report scholarship income, based on your own financial records, not the 1098-T. In the 1098-T screen, click on the link "What if this is not what I paid the school" underneath box 1. You will then be able to enter the actual amounts paid. Include what you paid plus what was paid by scholarship, so that the difference is the amount you claim for the college credit.

You can only claim the credit if you are claiming her as a dependent for 2019. Can yo do that? Read on, if you need an answer. Otherwise, she can claim it, on her return, even though you paid it.

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Graduation year

If he/she was a student (under 24) for at least 5 months and lived with you for more than half the year, and did not provide more than 1/2 his own support for the whole year, you can still claim him. Be sure he knows you're claiming him, so he doesn't claim himself. He can only be claimed once. But, he can "file taxes" without claiming his own exemption.

The real question is who should be claiming him in this "transition" year to adulthood. You two have to agree on who is going to claim his exemption. Each should do their taxes both ways and see which way the family comes out best. Even then, you have to meet the rules. The rule is that a child of a taxpayer can still be a “Qualifying Child” dependent, regardless of his income, if:

he is a full time student under 24 for at least 5 calendar months of the year (graduating in May usually means you meet the 5 month rule)
he did not provide more than 1/2 his own support (scholarships are considered 3rd party support and not support provided by the student).
lived with the parent (including time away at school) for more than half the year

So, it usually hinges on "Did he provide more than 1/2 his own support in 2019.

The support value of the home you provided is the fair market rental value of the home plus utilities & other expenses divided by the number of occupants. IRS Publication 501 on page 20 has a worksheet that can be used to help with the support calculation. See: http://www.irs.gov/pub/irs-pdf/p501.pdf