1098t across years

Forum|Forum|5 years ago
February 13, 2021
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Spring 2020 tuition/fee charges were listed on 2019 1098t while applicable scholarships/waivers showed up on 2020 1098t. There is a balance in both years counting as income but I'm in a higher tax bracket in 2020. So 2 questions: #1-can I override the 1098t, revise the 2019 return and move charges to 2020? #2-would the 2019 revision, now with higher taxes, be subject to late fees or penalties?

KrisD15

The IRS wants you to report what was PAID to the school in the Tax Year.

You will need to know when the scholarship posted to the school. I suggest you look at your student account.

You will also need to check whether a similar thing happened over 2018/2019.

Yes, you can use the screen in TurboTax to allocate part of the scholarship to 2019. It is found as you continue through the Education interview, not on the 1098-T input area.

You can also reduce the expenses for 2020.

According to the IRS:

“If you pay qualified education expenses in both 2019 and 2020 for an academic period that begins in the first 3 months of 2020 and you receive tax-free educational assistance, or a refund, as described above, you may choose to reduce your qualified education expenses for 2020 instead of reducing your expenses for 2019.”

If the scholarship posted in 2019, you can claim the additional income on an amended 2019 return or reduce the expenses on your 2020 return, resulting in additional 2020 income.. Yes, the additional tax on the 2019 return will be subject to penalty and interest. (If an education credit was taken in 2019, you would re-capture the credit on your 2020 return)

The school should NOT be reporting what was billed in the year, only what was paid. That is reported in Box 1 of the 1098-T. This was mandated in 2016 to avoid this cross-year reporting error.

IRS Pub 970 Page 15

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jkuster62Author

The kicker is that in shifting the tuition/fees, penalties and interest for revising the previous year return may eat up any advantage on the current year. These are things you don't really notice unless you're really on top of deductions.

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.

If you claim the tuition credit, you do need to report that you got one or that you qualify for an exception (the TurboTax interview will handle this)

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".