I received scholarship $ that I used for non-qualified expenses. The excess my school reported on 1098T is less than what I received. Do I report the extra anyway?

Forum|Forum|4 years ago
March 25, 2022
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This is for the calendar 2021 year. Part of the excess was for the 2020-2021 (vs the 2021-2022) school year. I don't think this makes a difference?

TurboTax Online

Best answer by AmyC

The scholarship money received during 2021 should be accounted for regardless of the school year. Taxes work on Jan 1- Dec 31 basis for income in and out. Scholarship income in excess of qualified education expenses paid during the 2021 year, are added to your wages. You may have multiple scholarships and the school does not account for them all. You would need to include all excess on your return.

You may want to move extra into the income column and leave up to $4k for expenses paid out of pocket to qualify for the AOTC. I recommend you look at another of my answers for help in maximizing your refund.

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boo_sterAuthor

Thanks for providing both the response and the link to the responses to a similar case. Since my parents can claim me as a dependent (even though I live alone, pay my rent, etc.), I've learned I'm not eligible for the education credits this year. Nonetheless reviewing the linked thread was still immensely helpful as the information may come in handy on future returns. So thank you for providing that.

One more question: Even though they're not listed on the 1098 T, can I deduct education expenses from the excess aid I received if I used the $ to pay for things like books and supplies? This was the actual use of some of the aid not reported by the university but I'm not sure of the rules.