1098-T

Forum|Forum|4 years ago
February 11, 2022
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My daughter received a 1098-T for 2021. The amount in Box 1 is $8163. The amount in Box 5 is $11000 (the amount of her scholarship for tuition only). If I enter these values as-is in TurboTax, it makes it appear that she had unearned income in 2021. I reached out to my academic institution and they indicated the actual amount of payments received (including scholarships) in 2021 was $20874. When I asked them why wasn't the $20874 amount reported in Box 1, their answer was the following:

"Note: In accordance with the IRS guidelines governing the 1098T calculations, the amount in Box 1 is the lesser of the total charges billed (including unpaid QTRE from a prior year that were paid in 2021) and the total amount of payments received in 2021" .

Anyone run into this situation before? I've checked the IRS instructions for those filing from 1098-T and can find no mention of the "lesser" guideline mentioned above. I've seen other posts indicating I should enter the amount I actually paid in 2021, not what's reported in Box 1. I'm somewhat hesitant to do this as I might accidently double count charges from previous tax years (as my university seems to arbitrarily choose to report amount paid vs amount billed in Box 1).

Sorry for my ignorance.

Hal_Al

Employee

Yes, this is a frequent problem, we see here in this form. And, yes, the solution is to workaround the 1098-T (essentially enter the amount you actually paid in 2021, not what's reported, in Box 1).

The 1098-T is only an 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 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. You will also reach a screen that allows you to adjust the scholarship amount for "amounts not awarded for 2021 expenses".