Do I include room and board fees in the full tuition amount for the 1098-T form?

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June 4, 2019
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KrisD15

No, room and board is not reported on 1098-T and is not an eligible education expense for the education credits; HOWEVER, if you received certain unrestricted tax-free assistance, such as a scholarship or distributions from a college savings account, you could apply those tax-free funds to room and board, therefor freeing up expenses to be applied to a credit.

You will report the expense of room and board on a different screen, not on the 1098-T.

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Tucson Joe

@KrisD15 Do you know which screen is used to enter this information in TurboTax? I couldn't find it when I filed my 2018 return, so I believe I ended up paying tax (plus possibly a 10 percent penalty) on money I withdrew from my child's 529 account to pay for her college dorm. I don't want to make that mistake again. I couldn't find anyplace in TurboTax to enter room and board expenses.

Carl11_2

Employee

The only thing that will ever be reported on a 1098-T is qualified education expenses. The qualified education expenses are tuition, books, and lab fees. Now while lab fees is a rather broad category, that's it with no exceptions ever.

Room and board is not a qualified expense. However, there are situations where monies targeted for educaiton can be used to pay for room and board, provided that room and board is in *direct support* of the education.

For example, if you are the named benificiary of a Coverdell or 529 account, money from that account can be used to pay for the qualified education expenses of tuition, books and lab fees as well as the unqualified but allowed expense of room and board *provided* that room and board is in "direct support" of the education.So what do I mean by "direct support"?

If you are enrolled as a full time student for the spring semester (Jan May) then while room and board is not a qualified expense, it's an "allowed" expense for 529 funds only for those 5 months. If you take the summer off (June-July) and do not attend classes yet you continue to live in the area of your college and pay for room and board, then for those two months the claim/deduction is not allowed. Since you didn't attend classes for June-July, your room and board expenses were not in "direct support" of the education.

THere's also limits on what you can claim for room and board.

Room is defined as rent, utilities and any maintenance/HOA dues you may be required to pay.

Board is defined as food basically.

Your room cost (rent, utilities, etc.) are limited to a maximum of $10,000 for the year or whatever it would cost you to live on campus - whichever is *lower*.

Your board (food cost) is limited to $5000 a year or whatever it would cost you to eat on campus if your school offers a food plan - again, whichever is *lower*.

Take special note that transportation costs are never a deductible education expense.

ostragoth

Employee

Hi Carl,

Where did you find these limits:

"Your room cost (rent, utilities, etc.) are limited to a maximum of $10,000 for the year or whatever it would cost you to live on campus - whichever is *lower*.

Your board (food cost) is limited to $5000 a year or whatever it would cost you to eat on campus if your school offers a food plan - again, whichever is *lower*."

Do you know what those limits are for 2020? Thanks,

KathrynG3

Actually, room and board is no longer deductible for the education credits, but it would not be taxable if the monies necessary for room and board were distributed from a Coverdell ESA or 529 plan. This was an old post; tax law is constantly changing.

See Is room and board deductible?

IRS Publication 970: Tax Benefits for Education

@ostragoth