My dependent studiend overseas at University. Turbo tax asks for form 1098T which doesn't exist overseas. How can I enter qualified education expenses without 1098T?

Forum|Forum|3 years ago
February 2, 2023
2 replies
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I had entered that it was an overseas University but Turbo Tax still wants a US address (zip code, EIN number etc) and the summary shows form 1098-T even though I said I don't have one. How can this 1098T form be fixed whilst retaining the education expenses so that I can submit my return?

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Hal_Al

Employee

After you tell TurboTax that you don't have a 1098-T, it asks if you qualify for an exception. Answer yes, if your school is on the Dept. of Education list.

To be eligible for the tuition credits, the course must be taken at "an eligible institution". The school should be able to tell you if it is an eligible educational institution. In general, an eligible educational institution is an accredited college, university, vocational school, or other postsecondary educational institution, including accredited, public, nonprofit, and proprietary (privately-owned, profit-making) postsecondary institutions. Additionally, in order to be an eligible educational institution, the school must be eligible to participate in a student aid program administered by the Department of Education. If they issue a 1098-T they are probably an eligible institution.

Enter your school at the link below, to see if it's on the dept. of education list.

https://ope.ed.gov/dapip/#/home

See if your school is on the U.S. Department of Education’s Database of Accredited Post Secondary Institutions and Programs (DAPIP) or the Federal Student Loan Program list. (from IRS web site)

Mango-muncherAuthor

This doesn't resolve my issue. I have tried deleting and restarting, but it always asks for a 1098-T even though we don't have one, as dependent studied overseas. I even tried saying that I don't have an exception but it still asks for school and state zip. How can I submit the tax return when the review throws up an error about 1098T that I cant fix? Please advise on a solution.

AmyC

Employee

You want to claim the Lifetime Learner's credit by:

Go to deductions and credits
Select expenses and scholarships (form 1098-T)
Enter higher education expenses? Yes
Choose student, continue
Working on degree.. select answer, continue
Enrollment status... select answer, continue
Name of school, enter name, continue
Did you get 1098-T? No
Exception -select I qualify for an exception if you do. See 1098-T , continue
Fill in the school info
Need federal id, select I can't find the ID
enter tuition
continue going through the section entering information

f you want to claim the AOTC, you are required to have the school EIN. See Pub 970 which states:

To claim the American opportunity credit, you must provide the educational institution's EIN on your Form 8863. You should be able to obtain this information from Form 1098-T or the educational institution.

Hal_Al is correct that to get any credit it must be an Eligible Educational Institution - Internal Revenue Service

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Minoo

Can I add a question for this ?

for 2022 , I didn’t receive any 1098t because school said I got it by full scholarship. I’m currently dependent by my parent . what should they say when file tax , should be like exception or something else ?
@AmyC

Hal_Al

Employee

Q. I didn’t receive any 1098t because school said I got it by full scholarship, should there be like exception or something else ?

A. Yes. After answering that you don't have a 1098-t, TurboTax will ask if you qualify for an exception. Answer yes.

There is a tax “loop hole” available. The student reports all his scholarship, up to the amount needed to claim the American Opportunity Credit (AOC), as income on his return. That way, the parents (or himself, if he is not a dependent) can claim the tuition credit on their return. They can do this because that much tuition was no longer paid by "tax free" scholarship. You cannot do this if the school’s billing statement specifically shows the scholarships being applied to tuition or if the conditions of the grant are that it be used to pay for qualified expenses.

Using an example: Student has $10,000 in box 5 of the 1098-T and $8000 in box 1. At first glance he/she has $2000 of taxable income and nobody can claim the American opportunity credit. But if she reports $6000 as income on her return, the parents can claim $4000 of qualified expenses on their return.

Books and computers are also qualifying expenses for the AOC. So, extending the example, the student had another $1000 in expenses for those course materials, paid out of pocket, she would only need to report $5000 of taxable scholarship income, instead of $6000.