1098T

Forum|Forum|5 years ago
April 6, 2021
1 reply
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My sons 1098T shows higher scholarships than tuition paid because of timing.
I paid spring 2020 in 2019. I assumed I could pay spring 2021 in 2020. But his college changed the billing to 2021. So only 1 semester of tuition is on the 1098 but 2 semesters of scholarships/grants. We do not have a 529 plan and I claim him as a dependent. Is there anything I can do to avoid him having to pay tax on the difference? I also lost the AOT credit. Frustrated!

Hal_Al

Employee

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 deduction 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. 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 2020 expenses".

Jaknhk12 Author

thank you for the response. But I didn’t think it was that cut and dried. It seems as if your comment contradicts the information I received below.
- Scholarships and grants are claimed/reported as taxable income (initially) in the year they are received. It does not matter what year that scholarship or grant is *for*

- Tuition and other qualified education expenses are reported/claimed in the tax year they are paid. It does not matter what year they pay *for*.

Understand that figuring out who claims the student as a dependent, and determining who claims the education expenses & credits, is two different determinations. It depends on the specific situation as outlined below.