Skip to main content
March 30, 2024
Question

Got a scholarship and used it to student loans for tuition. My 1098-T reports I paid less for tuition so its saying my scholarship is taxable. Is there a spot to put this

  • March 30, 2024
  • 1 reply
  • 0 views
I can't figure out if there is another spot to claim this as tuition because it was not income it went straight back into paying my loans off for tuition

1 reply

Hal_Al
Employee
March 30, 2024

It's not clear what your situation is.  But, it doesn't matter what you actually used the scholarship for or how you paid for any thing.   All that matters is how much  qualified educational expenses (QEE)(tuition, fees, books, computer) you had in 2023 and how much scholarship you had in 2023. Loan payments are not QEE* (particularly loans that paid for tuition in previous years, not 2023).

 

For more specific advice, provide actual numbers.  

 

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. 

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 2023 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.

 

*Loan payments are not a qualified expense for the tuition credit or to make scholarships tax free. Loan payments (up to $10K , lifetime total) are a qualified expense for a 529 plan distribution.