Is the hazlewood benefit reflected on 1098-T?

Forum|Forum|2 years ago
March 25, 2024
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I received a 1098-T for the college I attended last year. I use the Texas Hazlewood Act to cover tuition. Hazlewood covered all of my tuition, and I did not have to pay any of it out of pocket, nor did any other scholarship or grant contribute. I did, however, receive a Pell Grant of $3,447 that ended up being refunded to me since Hazlewood already covered my tuition. I will need to report this as taxable income since I did not use any of it for qualified educational expenses. Now, I am a bit confused on how to enter in my 1098-T on TT. Box 1 shows $3,287. I am assuming here that this would be from Hazlewood, as they covered all of my tuition. Box 5 shows $6,759. I am also assuming that a portion of that is the $3,447 Pell Grant. In TT, there is a question asking: "Did you receive any of the following tax-free benefits last year?" with GI Bill benefits and Veterans' benefits listed under it. Would I say yes? If I say yes, it is followed by: "What portion of the $6,759 from Box 5 on your 1098-T is from veterans' benefits and/or tax-free employer provided assistance?" If the Pell Grant ($3,447) was part of this, would I enter the remaining $3,312 as being from veterans' benefits? I don't know what else could possibly be lumped into that total other than Hazlewood. Would Hazlewood therefore be included in both boxes 1 and 5? I have called the payment office at this school to ask and they were not helpful, unfortunately.

Best answer by Hal_Al

Okay, great. Now, for the question: "Did you pay for room and board with a scholarship or grant" do I say "yes" and put the total of the Pell Grant, so that it gets counted as taxable income since I did not use it for qualified educational expenses? Or would this be calculated by TT even without me doing that?

Q. Okay, great. Now, for the question: "Did you pay for room and board with a scholarship or grant" do I say "yes" and put the total of the Pell Grant, so that it gets counted as taxable income since I did not use it for qualified educational expenses?

A. No. See the next question.

Q. Or would this be calculated by TT even without me doing that?

A. Yes. More importantly, you want to enter any other qualifying expenses, e.g. books and a computer, to reduce the amount of the Pell grant that gets taxed. Anything you enter for room & board, at that question, gets taxed regardless of other expenses entered.

We haven't talked about the education credit. Since your tuition is paid by Hazelwood, there is no tuition to claim for the credit. Books and a computer would be qualifying expenses, for the credit, if you are an undergrad.

https://www.irs.gov/Individuals/AOTC