1098-T

Forum|Forum|3 years ago
April 7, 2023
2 replies
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I am a college student who is still being claimed as a dependent. If my parent does their taxes for this year before filing my 1098-T form and they end up owning money, can the money that they would have gotten back be lessened?

For example, they would have gotten back $1500, but after doing their taxes they end up needing to pay $600 to the IRS. Will they get $1500 back or $900?

Not A Product Question

Hal_Al

Employee

The American Opportunity credit (AOC) is $2500 max, based on $4000 of tuition on the 1098-T. It is 40% refundable.

In simple terms, claiming the AOC means $2500 bigger refund or $2500 less tax.

tmunoz

It depends. In general, the Form 1098-T form shows some of the qualifying educational credits could help qualify for an educational tax credit, some of which might be applied to their taxes owed and some of which might be refunded. So usually it would not cause any extra tax bill and they are not required to enter it.

However, if there was a Form 1099-Q distribution from a 529 or Coverdell account, and it was distributed to your parents, they will need the Form 1098-T to show some of the qualified educational expenses.

And, if you had scholarships which were more than the cost of tuition, you may need to claim some of it as taxable income.

There is more information about Education Credits in this TurboTax Help article.

If this does not completely solve your question, please let us know more details, so we may better assist you.