Question

My 1098t has more scholarships than tuition, and i have about $500 in w2 and $150 in interest. someone said my scholarships would be taxable, but turbotax says owe noth

Forum|Forum|6 years ago
February 21, 2020
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TurboTax Free Edition Online

If your scholarship exceeds your qualified tuition expenses, the excess is taxable. Qualified tuition expenses include not only tuition and student fees, but also books and any required equipment or supplies for your course.

So, if your scholarship was more than tuition, student fees, books, required equipment and required supplies, and it is not showing up as taxable income, you should check your entries in the Education section to make sure everything has been entered properly.

If while in the Education interview you can't get to the 1098-T screen, keep clicking to Continue until you reach the summary screen at the end and you can edit the 1098-T entry and all your other education entries there.

Note that if the scholarship is for your dependent (i.e., you are the parent of the student), the scholarship is taxable on the student's tax return, not your tax return. But, the dependent student's 1098-T and other education expense still go on your return.

The TurboTax article at this link provides a good overview of how scholarships can be taxed.

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Hal_Al

Employee

Both statements can be true. Your excess scholarship is taxable. But, if your total amount of income is less than !2,200, then, you will owe no tax. In fact if the total is less than $12,200*, your student dependent does not need to file a tax return.

*The $12,200 is not a "hard number". You do not report your dependent's income on your return. If it has to be reported, at all, it goes on his own return. If your dependent child is under age 19 (or under 24 if a full time student), he or she must file a tax return for 2019 if he had any of the following:

Total income (wages, salaries, taxable scholarship etc.) of more than $12,200.
Unearned income (interest, dividends, capital gains) of more than $1100.
Unearned income over $350 and gross income of more than $1100
Household employee income (e.g. baby sitting, lawn mowing) over $2100 ($12.200 if under age 18)
Other self employment income over $400, including box 7 of a 1099-MISC

N

Naper

Hi - I am claiming my son as my dependent and entered his 1098T in my return. No American Opportunity Tax Credit taken. TurboTax says my son has to report taxes on the leftover grants. But you're saying that if a dependent has no income of any sort (earned and unearned), the leftover from grants is not taxable thus, my son does not need to file income tax. Is this correct?

Hal_Al

Employee

@Naper - Not exactly. But, if the taxable portion of his grants is less than $12,200 (and he has no other income), he does not to file. His standard deduction will wipe out all the taxable income and no tax will be due.