Full Scholarship TAX return

Forum|Forum|6 years ago
January 24, 2020
1 reply
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Hello,

I did not find information about this matter in the knowledge base, so please excuse me.

My daughter received full scholarship - FAFSA aid through Pell Grant and Cal Grant and University gave her "free" residence through its own scholarship. And this scholarship turned out to be even more the cost of the residency, so they paid her $900 in cash to her bank account plus $500 of private scholarship from Award Fund. Some money was spent on books and motebook, about $2000.

I have read the tones of articles about the taxes in the case of education scholarships, and still do not understand which tax return all this information, including pending 1099-T form, goes to? According to what I read it goes to my return because she is my dependent, but from another info it goes to her tax return because it is the full scholarship, I will not have any credits for it and it does make any sense to put it to my tax return.

Plus the residency, room and board, part of the aid is taxable and should go to daughter's TAX return.

So I am overall confused.

Thanks!

Best answer by JotikaT2

You will report the 1098-T tuition on your tax return and enter any applicable scholarships as part of your entries into the program.

Go to the Federal section.
Click on Deductions & Credits
Select the Education tab
Select Tuition and proceed to answer the questions.

Scholarships are taxable if used for the following items:

Room & board
Travel & incidental expenses
Any fees, books & supplies not required for classes

Scholarships are not taxable if used at an eligible school for a degree if used for:

Tuition & fees
Fees, books, supplies needed for classes
Scholarship or fellowship for services from:
National Health Services Corps Scholarship Program
Armed Forces Health Professions Scholarship & Financial Assistance program

Help for when scholarships are taxable vs. not taxable

The excess of the scholarship income over the actual allowed education expenses would be reported on your daughter's return as scholarship income.

However, she would need to meet the filing requirements threshold to determine if she even needs to file a return.

Please see the following to help you determine if she needs to file a tax return.

Gross income amount for dependents

JotikaT2Answer

You will report the 1098-T tuition on your tax return and enter any applicable scholarships as part of your entries into the program.

Go to the Federal section.
Click on Deductions & Credits
Select the Education tab
Select Tuition and proceed to answer the questions.

Scholarships are taxable if used for the following items:

Room & board
Travel & incidental expenses
Any fees, books & supplies not required for classes

Scholarships are not taxable if used at an eligible school for a degree if used for:

Tuition & fees
Fees, books, supplies needed for classes
Scholarship or fellowship for services from:
National Health Services Corps Scholarship Program
Armed Forces Health Professions Scholarship & Financial Assistance program

Help for when scholarships are taxable vs. not taxable

The excess of the scholarship income over the actual allowed education expenses would be reported on your daughter's return as scholarship income.

However, she would need to meet the filing requirements threshold to determine if she even needs to file a return.

Please see the following to help you determine if she needs to file a tax return.

Gross income amount for dependents

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StingerAlexAuthor

Zillions thanks! You are so great!

May I ask you the question if I have some problems upon receiving 1099-T?

KrisD15

Yes, you will enter the 1098-T and all other education information IF YOU ARE CLAIMING THE STUDENT as your dependent. If you are not claiming her, she would enter them.

If you are claiming her, you enter the information into your TurboTax program, so that it can make the calculations. Once the calculations are made, the program will tell you if there is a credit available and/or if there is tax due.

If there is a credit available, that credit will be claimed on your return.

If there is tax due, for example on a scholarship used for room and board, that tax will be reported on the students return. Your TurboTax program will tell you if the student needs to report taxable income, and if so, how.

The school should send the 1098-T. It may be mailed to you or your daughter's address, depending on what address the school has on file.

It might also be available online by looking at her online school account.

As a last resort, you can call the school and ask for a copy.

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