Question

If spring scholarships posted in January 22 this year (last spring it was in December) can you override and claim them in 21 1098T

Forum|Forum|4 years ago
March 10, 2022
4 replies
0 views

No text available

Employee

Money paid in 2021 is used for the education expense. If you paid the spring tuition in December, then it would count in the year paid. However, if you were not billed until January 2022, that would be money spent in 2022 and would be claimed on TY 2022 return. Enter the 1098T as is.

The AOTC credit maxes out once you have paid $4000 out of pocket so it may not make a difference. The AOTC is only good for 4 years and most students have 5+ years because you begin and end part way through the year. There is also a lifetime learning credit which can be used to save more dollars for the AOTC in other years.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

L

lori700Author

We were billed in December 21 with a due date of January 22...does this change the reply?

Your responses are always very clear to me...I have more questions I would love for you to review. Just trying to do this correctly and get good routine down each year with AOTC.

Example # if... 2021 1098T BOX 5 only shows Summer 21 scholarship $3100 and Fall 21 Scholarship $2900 = $6000 and BOX 1 shows QHEE payments =$9000 it appears AS IS that we would qualify for AOTC credit.

CONCERNS

BOX 1 includes Health and Wellness Fee of $80.
SPRING scholarships did not post till January 22 so not included in 2021 1098T -may cause taxable income next 1098T (2022) since scholarship not with QHEE expenses for that term.
Move scholarships to income?
Box 1 includes payment in 21 for 2020 December bill (spring 21)

QUESTIONS:

1. Wouldn't I need to deduct the $80 from the possible AOTC credit amount since on pg 16/17 it states that type of fee is not QHEE for AOTC?

2. Wouldn't I add on REQUIRED books paid $500 in 2021 out of pocket to AOTC credit amount?

3. I have read that if I payed part of the Spring bill (billed December 21) in January 22 I can't claim those in the 21 AOTC credit..is this correct? Had I payed in December I could use in 21 AOTC credit calculation?

4. If I paid any expenses for 2020 (paid in January 21) that showed in Box 1 of my 2021 1098T do I subtract those when figuring my AOTC credit even if they were not used for credit purposes in 2020?

5. If Room and Board were paid with 529 (covering all non qhee expenses) can I still move some scholarship money to taxable income on my daughters return to claim AOTC credit? Or no since there are no "non qhee expenses" left that were paid by other sources?

Lots of questions. Thanks in advance.

Hal_Al

Employee

Simple answer: yes. But you need to be sure you are correctly matching expenses to scholarship.

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.

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 2021 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.

S

SweetieJean

Employee

@Hal_Al Do you have a citation for this? TT Expert says otherwise.

Hal_Al

Employee

@SweetieJean I'm not sure what "this" is. But, no, I don't have a citation.

The common situation is: the school shows the Spring 2022 tuition in box 1 of the 2021 1098-T but fails to show the Spring 2022 scholarship in box 5 because of their own administrative shortcomings. Clearly there's a mismatch. That's why TT has the two entries in the interview:

"What if this is not what I paid the school" underneath box 1.

screen that allows you to adjust the scholarship amount for "amounts not awarded for 2021 expenses"

S

Spiders26

So, a little confused by this conversation but would appreciate comments. My son received an athletic scholarship in 2022. He paid the majority of his spring tuition in December 2021. Therefore, it appears he has income, however, this is not the case. How do I handle this?

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.

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 2021 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.

S

Spiders26

Thank you, I think you are saying during the Turbo tax interview process this issue will be addressed.

B

BookerM

I have a similar scenario where I paid for my Spring 2022 tuition in November 2021, but now my 1098-T form has nothing in box 1 for tuition expenses but my full Spring scholarship in box 5, causing me to owe taxes on the full scholarship even though that scholarship went towards my payment in November. How do I handle this? Thanks.

Hal_Al

Employee

Q. I paid for my Spring 2022 tuition in November 2021, but now my 1098-T form has nothing in box 1 for tuition expenses but my full Spring scholarship in box 5, causing me to owe taxes on the full scholarship even though that scholarship went towards my payment in November. How do I handle this?

A. As described above, you file or don't file the 1098-T, based on your own records and not an erroneous 1098-T.

Just don't enter the 1098-T, if you are not claiming a tuition credit or do not have any taxable scholarship to report.

If you claimed a credit, on your (or your parent's) 2021 return, Then some of the scholarship paid in 2022 may be taxable.