1098-T box 4

Forum|Forum|3 years ago
February 25, 2023
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We received a 1098-T with only box 4 filled out. Our son when to school in fall 2021 and in spring 2022 did not return. We received the 1098-T with box 4 for tax year 2022 for over $10k. We paid in full for the fall semester and the spring semester was credited. We asked the school where they are getting this amount from and no one from the Bursar's office can give us a straight answer other than "qualified expenses". They told us to contact our tax consultant. We are beyond confused. Is this 1098-T only for informational purposes like I've read on other posts? Or does this need to be on the tax return? Thank you.

Not A Product Question

Hal_Al

Employee

Q. Does this need to be on the 2022 tax return?

A. No. Do not enter it, in TurboTax, when you prepare your 2022 return.

Q. Is this 1098-T only for informational purposes like I've read on other posts?

A. Yes, but. 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. You claim the tuition credit, or report scholarship income, based on your own financial records, not the 1098-T.

If you claimed a tuition credit on your 2021 tax return, based on the amount in box 1 of the 2021 1098-T, you need to review that to see if you need to amend your 2021 tax return. Probably not. Reduce the 2021 box 1 amount by the 2022 box 4 amount. If there is still enough money ( probably $4000+) to claim the credit, you don't need to do anything.

You were allowed to claim 2022 tuition, paid in 2021, on your 2021 return. But since he did not return to school in 2022, it no longer counts (even if you didn't get a refund). So you may need to recalculate your 2021 tuition credit. For most people, the 2021 fall tuition was enough (without counting the 2022 tuition) to claim the full credit and no amendment is needed.

From the instruction for form 1098-T:

"Box 4. Shows any adjustment made by an eligible educational institution for a
prior year for qualified tuition and related expenses that were reported on a
prior year Form 1098-T. This amount may reduce any allowable education credit
that you claimed for the prior year (may result in an increase in tax liability for the
year of the refund). See “recapture” in the index to Pub. 970 to report a
reduction in your education credit or tuition and fees deduction'.
B