GI benefits

Forum|Forum|3 years ago
March 23, 2023
2 replies
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I am a student using the GI bill. My tuition is covered and I get a BAH grant that is all supposed to be non-taxable. When looking at my 1098-T, the Box 5 scholarships and grants seems to include all of this, but I was told not to claim this on my taxes as it is tax free. Should I only claim the amount within that scholarship and grant box that I received as a refund check?

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Vanessa A

Is box 5 greater than, less than or equal to box 1?

If box 5 is less than box 1, then you can enter the 1098-T as is. If you had out of pocket expenses, then you may qualify for an education credit.

If box 1 is equal to box 5, there is no need to enter your 1098-T as this would not produce a credit, nor would it have taxable income.

If box 5 is greater than box 1, and box 5 strictly consists of the GI Bill and the BAH grant, then even the excess would not be taxable income since this is considered a non-taxable military benefit.

If box 5 is greater than box 1 and box 5 includes more than the GI Bill and BAH grant (for example, a Pell Grant or other type of scholarship) then any part of the other grants or scholarships could potentially be taxable income if your military benefits fully covered your education expenses depending on how much additional grants and scholarships you received.

After you enter your 1098-T in TurboTax, you will be asked if any part of the scholarships and grants were tax-free stipends or grants. You will need to say yes, then enter the amount you received from the military. None of that amount will be taxable. TurboTax will calculate if there is a taxable amount based on how much additional grants and scholarships have been received.

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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 possibly your student has taxable scholarship income.

Since you know that neither of those are true, you do not need to enter the 1098-T. in TurboTax.

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 2022 expenses".

Or if you find it easier, just change the numbers in boxes 1& 5 to what your records show. The 1098-T that you enter in TT is not sent to the IRS.