1098-T

Forum|Forum|3 years ago
March 10, 2023
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I received a 1098-T. Would I need to report the information? I have amounts both within boxes 1 and 5. Any help would be greatly appreciated!

Vanessa A

It depends.

Are you a dependent on someone else's return? If so, then they would enter it on their return to claim an Education Credit. If no one else claims you, then you may be able to claim an education credit using your 1098-T. You can use this IRS tool to see if you are eligible or if your parents (if you are claimed) can claim the credit.

Is box 5 higher than box 1? If so, then yes, you must enter this on your return as the excess amount would be taxable income.

If you (or someone who claims you) do not qualify for the education credit, and box 1 is not less than box 5, you would not need to enter the 1098-T on your return.

If you do want or need to enter it you can do so by selecting the following:

Federal
Deductions and Credits
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Hal_Al

Employee

Q.I received a 1098-T. Would I need to report the information?

A. 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 have taxable scholarship income. If you (or your parent) claim the tuition credit, you do need to report that you got one.

If the student's qualified higher education expenses (QHEE -tuition, fees and course materials) exceed her scholarships, the parent may count the net you paid, in claiming the tuition credit, on their return. However, if her scholarships exceed her QHEE (they paid for room & board too), the excess is taxable income and gets reported on her return.

There is a tax “loophole” available. The student reports all his scholarship, up to the amount needed to claim the American opportunity credit, as income on his return. That way, the parents can claim the tuition credit on their return. They can do this because that much tuition was no longer paid by "tax free" scholarship. You cannot do this if the school’s billing statement specifically shows the scholarships being applied to tuition or if the conditions of the grant are that it be used to pay for qualified expenses. Reply back for more detail, if needed.