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March 15, 2023
Question

Can I add the 1098T to my taxes or should my daughter add the 1098t?

  • March 15, 2023
  • 3 replies
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I'm head of house claiming her as a dependent

3 replies

Employee
March 15, 2023

You would use the form to claim education credit if otherwise qualified since a dependent student can’t claim it. If the student has scholarship income greater than qualified expenses the student uses the form to report that difference as income. 

March 15, 2023

If you claim your daughter as a dependent only you can claim her education credits and you should add her form 198-T to your tax return.

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Hal_Al
Employee
March 15, 2023

Q.  Can I add the 1098T to my taxes or should my daughter add the 1098t?

A. Simple answer: you add the 1098-T to your taxes, because the student is your dependent. The tuition credit goes to the person who claims the student's exemption (dependency).

 

The longer answer is more complicated. The 1098-T is only any informational document. The numbers on it are not required to be entered onto your tax return. If you claim the tuition credit, you do need to report that you got one. 

 

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. Unfortunately that sometimes means working around the 1098-T and the TurboTax interview.

If her qualified higher education expenses (QHEE -tuition, fees and course materials) exceed her scholarships, you may count the net you paid, in claiming the tuition credit, on your return. However, if her scholarships exceed her QHEE (they paid for room & board too), the excess is taxable income and gets reported on her return.

 There is a tax “loophole” available. The student reports all his scholarship, up to the amount needed to claim the American opportunity credit, as income on his return. That way, the parents can claim the tuition credit on their return. They can do this because that much tuition was no longer paid by "tax free" scholarship.  You cannot do this if the school’s billing statement specifically shows the scholarships being applied to tuition or if the conditions of the grant are that it be used to pay for qualified expenses.