1098-T does scholarship (including room and board) beyond qualified expenses need to be reported? If so- I am a dependent- is this reported on mine or parents return?

Forum|Forum|6 years ago
June 1, 2019
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I received a college scholarship through the Army ROTC; 1098-T shows I received about $4,000 more in scholarship than the reported qualified expenses (the scholarship included room & board). Room & board is a taxable scholarship benefit; however I also found (outside the IRS website) that if the difference is less than a certain amount (including my W2 earnings) this does not need to be reported (I could not find references to this on the IRS websites). I am trying to clarify that this excess would be reported on my tax return (and because it was below a certain amount- it did not need to be reported); or was this excess supposed to be reported on my parents return? I am claimed as a dependent on my parents return.

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Best answer by Hal_Al

ROTC scholarships and the service academies are specifically exempted from taxation in the tax code. So the scholarship and the monthly stipend student-cadets receive from ROTC are usually exempt from tax.

ROTC scholarships usually only covers tuition, fees and course materials (books). It sounds like you have other scholarships, in addition to ROTC. There is an option, in the ROTC program, for you to choose the ROTC scholarship to be for room and board, if you already have other scholarships paying tuition. I can find no source saying that the ROTC scholarship is still tax free in that situation. In fact, most sources infer that it is taxable (http://www.ehow.com/info_8747258_tax-treatment-rotc-payments.html).

(Answer revised)

Hal_AlAnswer

Employee

ROTC scholarships and the service academies are specifically exempted from taxation in the tax code. So the scholarship and the monthly stipend student-cadets receive from ROTC are usually exempt from tax.

ROTC scholarships usually only covers tuition, fees and course materials (books). It sounds like you have other scholarships, in addition to ROTC. There is an option, in the ROTC program, for you to choose the ROTC scholarship to be for room and board, if you already have other scholarships paying tuition. I can find no source saying that the ROTC scholarship is still tax free in that situation. In fact, most sources infer that it is taxable (http://www.ehow.com/info_8747258_tax-treatment-rotc-payments.html).

(Answer revised)

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TaxGuyBill

Employee

Thanks. I know that the "stipends" were not taxable, but I didn't realize (or forgot) that the scholarships were not taxable either.
<a rel="nofollow" target="_blank" href="https://www.irs.gov/publications/p970/ch01.html#en_US_2015_publink1000178026">https://www.irs.gov/publications/p970/ch01.html#en_US_2015_publink1000178026</a>

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TaxGuyBill

Employee

EDIT: See other answer for special rules for ROTC scholarships.

Yes, it is reported on your tax return, not your parents' tax return.

However, in most cases, if your total income (including the taxable scholarship) is less than $6300, you are not required to file a tax return.

In the event you had self employment income of over $400, or had more than $350 of other non-earned income (interest, dividends, capital gains), that could require you to file a tax return, even if your total income is under $6300.

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mikaelataxesAuthor

Employee

Thanks-Bill. Hal has also been providing some help, which is appreciated (but this still seems a little unclear with some of Hal's latest input. Is there any IRS publication that states the less than $6300? unless I overlooked it (although I have read it a few times now) I could not find it in publication 970.